AMS Proposes to Eliminate Cotton Import Fee De Minimis Provision
08 January 2016
The U.S. Department of Agriculture’s Agricultural Marketing Service is seeking comments by 11 January on a proposal to amend the Cotton Board Rules and Regulations to remove the cotton import de minimis provision. The Cotton Research and Promotion Program assesses a fee on U.S. cotton producers as well as importers of cotton and cotton-containing products. However, importers are exempt from paying the cotton import fee if a line item on CBP documentation is US$2.00 or less.
The exemption was initially established to lessen the administrative burden of collecting an import assessment, which was originally estimated to be US$2.00 per line item, in instances in which the transaction costs of the collection would exceed the actual value of the assessment. However, technological advances in the CBP documentation process have significantly reduced the transaction costs associated with collecting import assessments and CBP has since stopped charging the USDA for the processing and collecting of such assessments. Given that transaction costs no longer exceed assessment rates of US$2.00 or less, AMS is proposing to remove the de minimis provision from the regulations. In addition, the definition of cotton with respect to procedures for conducting the sign-up period would also be modified.
Separately, AMS has determined not to conduct a referendum among producers and importers regarding the continuation of the cotton import fee. This determination is based on the results of sign-up period conducted 3-14 August 2015 during which eligible cotton producers and importers were provided an opportunity to request a referendum.
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