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Details of the Senate-Passed Miscellaneous Trade and Technical Corrections Act

On March 4, 2004, the Senate passed its version of H.R. 1047, the "Miscellaneous Trade and Technical Corrections Act of 2003."

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Senator's "Hold" is Preventing House-Senate Conference

As the House and Senate have passed different versions of H.R. 1047, the next step would normally be a House-Senate conference to resolve differences between the two versions of the bill.

However, Congressional sources state that a Senator has placed a "hold" on the Senate's version of H.R. 1047 which prevents a House-Senate conference from being convened. (One source noted that this "hold" is currently anonymous.)

Congressional sources note that if this "hold" can be lifted, the Senate is expected to request a conference with the House to resolve the differences in their two versions of H.R. 1047. If resolved in this manner, each body would then pass the conference version of H.R. 1047, which would then be sent to the President for enactment.

This is Part VIII of a multi-part series of summaries on the Senate-passed version of H.R. 1047 (H.R. 1047) and covers drawback provisions in 19 USC 1313 and 19 USC 1593a(h). See future issues for additional summaries on additional drawback provisions and other provisions of H.R. 1047.

Drawback for Packaging Material (19 USC 1313(q))

H.R. 1047 would amend 19 USC 1313(q) to read as follows:

(1)Packaging material under subsections (c) and (j) - Packaging material, whether imported and duty paid, and claimed for drawback under either subsection (c) or (j)(1), or imported and duty paid, or substituted, and claimed for drawback under subsection (j)(2), shall be eligible for drawback, upon exportation, of 99 percent of any duty, tax, or fee imposed under Federal law on such imported material.
(2)Packaging material under subsections (a) and (b) - Packaging material that is manufactured or produced under subsection (a) or (b) shall be eligible for drawback, upon exportation, of 99 percent of any duty, tax, or fee imposed under Federal law on the imported or substituted merchandise used to manufacture or produce such material.
(3)Contents - Packaging material described in paragraphs (1) and (2) shall be eligible for drawback whether or not it contains articles or merchandise, and whether or not any articles or merchandise it contains is eligible for drawback.
(4)Employing packaging material for its intended purpose prior to exportation - The use of any packaging material for its intended purpose prior to exportation shall not be treated as a use of such material prior to exportation for purposes of applying subsection (a), (b), or (c), or paragraph (1)(B) or (2)(C)(i) of subsection (j).
(5)Apportionment - When imported packaging material is classifiable along with its contents, the duty on the packaging material eligible for drawback shall be apportioned in accordance with regulations issued by the Secretary of the Treasury.

Penalties for False Drawback Claims (19 USC 1593a(h))

H.R. 1047 would amend 19 USC 1593a(h) regarding the issuance of regulations for penalties for false drawback claims so that it references both 19 USC 1593a(c) (maximum penalties) and 19 USC 1593a(g) (repetitive violations).

Unused Merchandise Drawback (19 USC 1313(j))

H.R. 1047 would revise 19 USC 1313(j) regarding unused merchandise drawback by amending:

  1. USC 1313(j)(1), which provides for direct identification unused merchandise drawback, in order to replace the phrase "because of its importation" with the phrase "upon entry or importation;"
  2. USC 1313(j)(2), which provides for commercially interchangeable (substitution) unused merchandise drawback, in order to replace the phrase "because of its importation" with the phrase "upon entry or importation;" and
  3. USC 1313(j)(2)(C)(ii)(II) to state "then, notwithstanding any other provision of law, upon the exportation or destruction of such other merchandise the amount of each such duty, tax, and fee paid regarding the imported merchandise shall be refunded as drawback hereunder..."

(Congressional and trade sources have previously stated that these changes would reverse the portion of a 1999 decision of the Court of Appeals for the Federal Circuit (CAFC) (Texport Oil Company v. U.S.) which eliminated the Harbor Maintenance Fee's (HMF's) eligibility for certain duty drawback.)

(See ITT's Online Archives or 03/11/04, 03/12/04, 03/18/04, 03/19/04, 03/24/04, 04/01/04 and 04/02/04 news, 04031105, 04031215, 04031820, 04031910, 04032415, 04040115, and 04040205, for Parts I-VII of this series of summaries on the Senate-passed version of H.R. 1047.)

Senate-passed version of H.R. 1047 available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_bills&docid=f:h1047eas.txt.pdf.