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Import licensing is one of the tools the U.S. Department
of Agriculture (USDA) uses to administer the tariff-rate quota (TRQ) system for
U.S. imports of dairy products. TRQs replaced Section 22 import quotas for dairy
products on Jan. 1, 1995, as a result of the Uruguay Round Agreement.
Under
these TRQs, a low tariff rate, called the low-tier rate, applies to imports up
to a specified quantity. A higher tariff rate, called the high-tier rate,
applies to any imports in excess of that amount. High-tier tariff rates were
reduced by 15 percent over the 6 years since the Uruguay Round Agreement was
implemented in 1995, while quantities subject to low-tier rates were increased
gradually over that same period. TRQ rates and quantities vary by product.
For dairy products subject to TRQs, an import license from USDA’s
Foreign Agricultural Service (FAS) is generally required to bring in items at
the low-tier tariff rate. No license is required to import products at the
high-tier rate; to import dairy products for an agency of the U.S. Government;
or to bring in products for personal use, as long as net weight does not exceed
5 kilograms (11 pounds) in any one shipment.
FAS issues licenses in late December each year for the following calendar
year (January 1-December 31).
What products are covered?
The licensing system covers nearly all dairy products from cow’s
milk, except for soft-ripened cheeses such as Brie. It also covers blue cheese
made from sheep’s or goat’s
milk.
Is a license needed to import a small amount of dairy products for a trade
show, research, or other special use?
If you do not have a license and want to pay the low-tier duty, you must ask
FAS to send an "ex-quota permit" to the U.S. Customs Service at the port of
entry. FAS will consider ex-quota permits for imports of samples that will not
enter U.S. commerce but are to be used at a trade fair, by a foreign embassy, or
for taking orders, research, or testing of equipment. You do not need a license
to import a product if you pay the high-tier duty rate.
What products may be imported without a license?
You do not need a license to import soft-ripened cow’s-milk
cheeses, such as Brie, or products from 100-percent sheep’s
or goat’s milk (except for blue cheese
made from or containing sheep’s or
goat’s milk).
Certain dairy products may also be imported without a license under a
"first-come, first-served" system. This means these products may be brought in
at the low-tier duty rate until a specified TRQ is filled. Once the TRQ is
filled, importers have to pay the high-tier duty. The items covered under the
first-come, first-served system include:
dairy products imported under a Free Trade Agreement
cheddar cheese from Canada (made from unpasteurized milk and aged 9
months or more),
fluid milk or cream (fresh or sour),
milk or cream (condensed or evaporated and in airtight containers), and
dried buttermilk or whey
You can find a complete list of first-come, first-served dairy products and
the corresponding TRQs in the FAS Dairy Monthly Imports Circular. Visit the FAS
website to view the monthly circulars.
What import rights and limitations are conveyed by a license?
All licenses have specific limitations. A typical license will identify the
product, the country the product can be imported from, and the maximum amount
that can be imported under that license.
An "any country" license allows imports of a certain quantity of a particular
product from any country in the world, instead of only one country.
An "other country" license allows an importer to import a certain quantity of
a particular product from any country other than a country that already has a
specific TRQ. For example, the following suppliers have specific country TRQ
allocations for American-type cheese: Australia, New Zealand, the European
Union, and other countries. An importer with an "other country" license for
4,691 kilograms of American-type cheese could import up to that amount from
Armenia or another country which is not one of the three countries or regions
with a specific TRQ allocation.
What is the fee for a license?
The fee is currently $150 per license. The fee is based on the FAS estimated
expenses to administer the licensing system. FAS publishes the fee for the
upcoming year in the Federal Register, usually around August.
What is the difference between historical and non-historical licenses?
Historical licenses are renewable. A person with a historical license in one
year may ask for a license for the same product from the same country for the
next year. A new license will be issued as long as that person has met the
requirements of the regulation. Non-historical licenses cannot be renewed. A
person may reapply for an identical non-historical license for the next year,
but the application may or may not be granted because these licenses are issued
through a lottery.
What are designated licenses?
These cheese import licenses are issued to importers who have met the
regulations qualification standards and have been designated by the government
of the exporting country to receive a license. Not all countries participate in
the designation process. (See appendix 3 of the regulation for a list of
participating countries and cheese types.)
What are the qualification requirements for a dairy import license?
First, you must have a place of business in the United States and an agent
for service of process (a representative available during business hours should
USDA need to serve legal papers on the company). There are also different
qualification standards listed in section 6.23 of the dairy import licensing
regulation for importers, exporters, and manufacturers. Note that exporters may
apply for licenses to import non-cheese dairy products, such as butter, but not
for licenses to import cheese or cheese products.
How does an importer qualify for a license to import cheese or cheese
products?
You must have been the owner and importer of record of either of the
following: at least 19,000 kilograms of cheese or cheese products in eight or
more shipments, with each of the eight shipments weighing at least 450 kilograms
(net), and with at least two of the eight shipments imported during each of any
three quarters of the eligibility period (September 1-August 31); or at least
57,000 kilograms of cheese or cheese products in three or more shipments during
the eligibility period, with each of the three shipments weighing at least 2,000
kilograms (net). For example, for a 2007 license, FAS will review an applicant’s
imports from Sept. 1, 2005, through Aug. 31, 2006.
Qualifying cheese or cheese product imports include:
- imports under licenses,
- imported goat’s and sheep’s
milk cheese,
- imports of cheese not covered by the licensing system (such as Brie),
including imports
under the first-come, first-served system, and
- imports at the high-tier duty rate
There are other qualification requirements for currently licensed people who
request licenses for the next year; see section 6.23 of USDA’s
dairy import licensing regulation. "Cheese" and cheese products" are defined in
section 6.21 of the regulation.
What if someone else was the owner and importer of record for the qualifying
shipments?
You cannot use imports to qualify for a license unless you were the owner and
importer of record at the time the product entered the United States.
How does an importer qualify for a license to import non-cheese dairy
products?
You must import dairy products (defined in section 6.21 of the regulation) in
the same minimum quantities, number of shipments, and minimum shipment weights
as specified for cheese or cheese products.
Qualifying dairy imports include:
imports of cheese or other dairy products under license,
imported goat’s and sheep’s
milk cheese,
imports of dairy products not covered by the licensing system (such
as ice cream), including imports under the first-come, first-served
system, and
imports at the high-tier duty rate
Imports of chocolate crumb cannot be used to qualify for a non-cheese import
license.
How does a cheese manufacturer or processor qualify for a license to import
cheese or cheese products?
You must be the owner or operator of a plant located in the United States and
listed under Section II (or Section I as a cheese processor) in the most recent
edition of USDA’s Dairy Plants
Surveyed and Approved for USDA Grading Service.
In addition, you must have manufactured, processed, or packaged at least
450,000 kilograms of cheese or cheese products in that plant during the
eligibility period (September 1-August 31).
The publication, Dairy Plants Surveyed and Approved for USDA Grading Service,
is available from:
U.S. Department of Agriculture
Agricultural Marketing Service
Dairy Grading Branch
Web: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateM&navID=FindaListofDairyApprovedPlants&rightNav1=FindaListofDairyApprovedPlants&topNav=&leftNav=GradingCertificationandVerfication&page=DairyGrading&resultType=&acct=grddairy
How does a dairy products manufacturer or processor qualify for a license to
import non-cheese dairy products?
You must be the owner or operator of a plant located in the United States and
listed in any of the sections of the most recent edition of USDA’s
Dairy Plants Surveyed and Approved for USDA Grading Service. In addition, you
must have manufactured, processed, or packaged at least 450,000 kilograms of
dairy products in that plant during the eligibility period (September 1-August 31).
A manufacturer or processor with an import license must use at least 75
percent of its licensed imports in its own plant. See section 6.27(b) of the
regulation.
How does a dairy products exporter qualify for a license to import non-cheese
dairy products?
You must have exported 19,000 kilograms of dairy products in eight or more
shipments, with each of the eight shipments weighing at least 450 kilograms
(net), and with at least two of the eight shipments exported during each of any
three quarters of the eligibility period (September 1-August 31); or at least
57,000 kilograms of dairy products in three or more shipments during the
eligibility period, with each of the three shipments weighing at least 2,000
kilograms (net).
If a company with dairy import licenses is sold, will FAS transfer the
licenses to the new owner?
Licenses can be transferred if the sale meets certain conditions, which are
established in section 6.28 of the regulation. If you buy a company with
historical licenses, you will be able to apply for that company’s
licenses for the next year, assuming you have met USDA’s
regulatory requirements for the sale, as well as the eligibility criteria. If
you buy a company with designated licenses, you will also need to be designated
by the government of the exporting country to receive those licenses for the
next year.
What documents should accompany an application for an import license?
If you are an importer, you must provide copies of Customs Form 7501 showing
that you are the importer of record of the products. If you are an exporter, you
must provide copies of Census Form 7525 (or a copy of your electronic
submission), as well as copies of the related commercial invoices and bills of
sale. Alternatively, application may be made through the internet from the
program (DAIRIES) website at:
http://www.fas.usda.gov/itp/imports/license/usdairylicenseapps.asp
If you are a manufacturer or processor, you are not required to provide
additional documents with your application. However, you may be audited by USDA
to verify your compliance with the requirement to use 75 percent of your imports
in your own plant and to process at least 450,000 kilograms of cheese or other
dairy products (as appropriate) in your plant.
How can an applicant find out a product’s
tariff classification?
You need to know the Harmonized Tariff Schedule classification of your
product so you can apply for an import license matching your needs and pay the
appropriate duty. If you are not sure how your product is classified under the
U.S. tariff system, you must contact the U.S. Customs and Border Protection and
obtain a classification ruling on your product. FAS does not have the authority
to classify products for U.S. Customs purposes and cannot provide advice to the
public on classification matters.
You can contact your local U.S. Customs and Border Protection office (see
Customs Service or Department of Homeland Security, Customs Service, in the U.S.
Government listings in your telephone directory) or:
U.S. Customs and Border Protection
National Commodity Specialists Division
1 Penn Plaza 10th Floor
New York, NY 10119
Tel: (646) 733-3030
Is an import license the same as a health certificate?
An import license is not a health or sanitary certificate, which may also be
required to import dairy products. The U.S. Food and Drug Administration (FDA)
has information on health and sanitary requirements for imported dairy products.
You can contact FDA at the address listed below.
Who can provide information about health and labeling standards for imported
dairy products?
Contact the FDA at:
Food and Drug Administration
Office of Plant and Dairy Foods and Beverages
HFS-300
5100 Paint Branch Parkway
College Park, MD 20740-3835
Tel: (301) 436-1700
Fax: (301) 436-2632
Where can importers obtain information on livestock disease and quarantines
in foreign countries?
Contact USDA’s Animal and Plant
Health Inspection Service (APHIS) at:
U.S. Department of Agriculture
Animal and Plant Health Inspection Service
Veterinary Services, NCIE
Animal Products Program
4700 River Road, Unit 40
Riverdale, MD 20737-1231
Tel: (301) 734-3277
Fax: (301) 734-8226
What are the import license application deadlines?
You should request an application or register in August if you want to apply.
Completed applications must be postmarked or electronically submitted no earlier
than September 1 and no later than October 15 to be accepted. There is no
application fee.
To request a license application or registration information, a copy of USDA’s
dairy import licensing regulation, a list of persons and firms with dairy import
licenses, or other information on USDA’s
licensing system, contact:
Import and Trade Support Programs Division
Office of Trade Programs, FAS/USDA
Stop 1021
1400 Independence Ave., SW
Washington, DC 20250-1021
Tel: (202) 720-1344
Fax: (202) 720-0876
General information about the Dairy Import License Program is available on
the Internet at: http://www.fas.usda.gov/itp/imports/usdairy.asp
Dairy Export Incentive Program