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in currency of the United States any amount expressed in a foreign currency for which such a par value was maintained for the date as of which the value or cost requiring conversion is to be determined, such conversion, except as specified in subsection (d), shall be made at such par value.

"(b) If no such par value was so maintained for such date, the conversion shall be made at the buying rate for the foreign currency in the New York market at noon on the date as of which the value or cost requiring conversion is to be determined, or, if banks are generally closed on such date in New York City, then the buying rate at noon on the last preceding business day. For the purposes of this subsection, such buying rate shall be the buying rate for cable transfers payable in the foreign currency in which the amount to be converted is expressed, and shall be determined by the Federal Reserve Bank of New York and certified to the Secretary of the Treasury, who shall make it public at such times and to such extent as he shall deem necessary. In ascertaining such buying rate, such Federal Reserve bank may in its discretion (1) take into consideration the last ascertainable transactions and quotations, whether direct or through exchange of other currencies, and (2) if there is no market buying rate for such cable transfers, calculate such rate from actual transactions and quotations in demand or time bills of exchange or from the last ascertainable transactions and quotations outside the United States in or for exchange payable in United States currency or other currency.

"(c) If, pursuant to subsection (b), the Federal Reserve Bank of New York certifies more than one rate of exchange for a particular foreign currency for any date the conversions for customs purposes of amounts expressed in that currency for that date shall be made by applying the applicable rate or rates so certified which reflect effectively the value of that foreign currency in commercial transactions.

(d) When there are one or more rates of exchange which vary by more than 5 per centum from the par value for any foreign currency listed pursuant to subsection (a), the list shall so indicate. In that event such additional rates of exchange may be certified in the manner set forth in subsection (b) and the par value and any certified rates shall be applied in the manner prescribed in subsection (c)."

(b) Section 481 (a) of the Tariff Act of 1930 (U. S. C., 1946 edition, title 19, sec. 1481 (a)), is amended by deleting subparagraph (7) and by renumbering subparagraphs (8), (9), and (10) as (7), (8); and (9).

(c) Section 481 (b) of the Tariff Act of 1930 (U. S. C., 1946 edition, title 19, sec. 1481 (b)) is amended by deleting the comma after the second word "purchase" substituting a period therefor, and deleting the remaining words of the subsection.

TRANSFERS OF GOODS IN BONDED WAREHOUSE

SEC. 23. (a) Section 557 (b) of the Tariff Act of 1930, as amended (U. S. C., 1946 edition, title 19, sec. 1557 (b)), is further amended to read as follows:

"(b) The right to withdraw any merchandise entered in accordance with subsection (a) of this section for the purposes specified in such subsection may be transferred upon compliance with regulations prescribed by the Secretary of the Treasury and upon the filing by the transferee of a bond in such amount and containing such conditions as the Secretary of the Treasury shall prescribe. The bond shall include an obligation to pay, with respect to the merchandise the subject of the transfer, all unpaid regular, increased, and additional duties, all unpaid taxes imposed upon or by reason of importation, and all unpaid charges and exactions. Such transfers shall be irrevocable, shall relieve the transferor from all customs liability with respect to obligations assumed by the transferee under the bond herein provided for, and shall confer upon the transferee all rights to the privileges provided for in this section and in sections 562 and 563 of this Act which were vested in the transferor prior to the transfer. The transferee shall also have the right to receive all lawful refunds of moneys paid by him to the United States with respect to the merchandise the subject of the transfer, but shall have no right to file any protest under section 514 of this Act except as to decisions with respect to his rights under subsection (c) of this section or under section 562 or 563 of this Act or against a decision as to the rate or amount of duty, tax, charge, or exaction when such rate or amount has been changed by statute or proclamation on or after the date of the transfer. The transferee shall have no right to file an appeal for reappraisement under section 510 of this Act, except when subsequent to the transfer and before a withdrawal for consumption has been deposited for the merchandise, it has been changed in condition pursuant

to the provisions of section 562 or 311 of this Act in a manner which necessitates that it be appraised in its changed condition in order that the correct amount of duties may be assessed. No new or separate liquidation, reliquidation, or determination shall be made in the name of, or on behalf of, a transferee, except with regard to any matter which may arise under subsection (c) of this section or section 562 or 563 of this Act when the transferee has invoked either of these sections, and in the case of a statutory or proclaimed change in the rate of duty, tax, charge, or exaction applicable to the merchandise the subject of the transfer and effective on or after the date of the transfer. A transferee may further transfer the right to withdraw merchandise, subject to the provisions of this. subsection relating to original transfers."

(b) Notwithstanding any other provision of this Act, the foregoing subsection (a) shall be effective with respect to merchandise entered after the date of the enactment of this Act and to merchandise which has been entered before that date and is the subject of a transfer within the purview of section 557 (b) of the Tariff Act, as amended by this Act, and made after the date of the enactment of this Act.

CUSTOMS SUPERVISION

SEC. 24. The Tariff Act of 1930, as amended, is further amended by adding following section 645 (U. S. C., 1946 edition, title 19, sec. 1645) a new section 646, reading as follows:

"SEC. 646. CUSTOMS SUPERVISION.

"Wherever in this Act any action or thing is required to be done or maintained under the supervision of customs officers, such supervision may be direct and continuous or by occasional verification as may be required by regulations of the Secretary of the Treasury, or, in the absence of such regulations for a particular case, as the principal customs officer concerned shall direct."

SAVING CLAUSE

SEC. 25. Except as may be otherwise provided for in this Act, the repeal ofTM existing law or modifications thereof embraced in this Act shall not affect any act done, or any right accruing or accrued, or any suit or proceeding had or commenced in any civil or criminal case prior to such repeal or modification, but all liabilities under such laws shall continue, except as otherwise specifically provided in this Act, and may be enforced in the same manner as if such repeal or modification had not been made.

Mr. JENKINS. We have as our first witness this morning a very distinguished gentleman. We are proud to have him with us. Mr. H. Chapman Rose, Assistant Secretary of the Treasury.

Mr. Rose comes from Ohio from a community near my district. His wonderful father and mother are there. He visits there as often as he can.

Mr. Rose, we appreciate the importance of your position and also the importance of the task before you. We are starting a hearing on a very important measure in which the country is greatly interested. We shall be very glad to hear from you.

STATEMENT OF HON. H. CHAPMAN ROSE, ASSISTANT SECRETARY OF THE TREASURY, ACCOMPANIED BY CHARLES R. MCNEILL, ASSISTANT GENERAL COUNSEL; DAVID B. STRUBINGER, ACTING COMMISSIONER OF CUSTOMS; W. R. JOHNSON, ASSISTANT TO THE COMMISSIONER OF CUSTOMS

Mr. ROSE. Mr. Chairman, members of the committee, I am very grateful for the opportunity to appear befor the committee to testify on H. R. 5106, introduced by you, Mr. Jenkins, as a member of this. committee.

Mr.

I want to introduce also the men who are here with me. Strubinger, Acting Commissioner of Customs, Mr. Johnson, Assistant to the Commissioner of Customs, and Mr. McNeill, Assistant General Counsel of the Treasury, who are here to answer any questions you may have.

Mr. JENKINS. I should say that at any time you wish to use any one of the gentlemen, you feel free to do so, so you can present your case in the best way possible.

Mr. ROSE. Thank you very much.

The bill, which has for its purpose the simplification of customs procedures, incorporates nearly all of the suggestions made by the Treasury Department for legislation to remove from the statutes many obsolete requirements and to make possible the institution of modern procedures in the administration of customs laws.

The principal source of these Treasury recommendations regarding customs simplification is the survey of the customs service conducted 5 years ago by a private firm of management consultants. This survey was made with funds specifically authorized by the 80th Congress in the customs appropriation for the fiscal year 1948. Recommendations for improvements in customs procedures also came from the customs service itself, from other Government departments, and from representatives of importers and other interested groups.

Mr. JENKINS. Will you allow me to make one observation at that point. I think it is the general opinion of those with whom I met on this matter, that something ought to be done toward simplification. Furthermore, the general impression is that this bill with some reasonable amendments will accomplish that.

Mr. ROSE. The Treasury agrees heartily that something does need to be done in the way of simplifying procedures, and that this bill will go a long way toward accomplishing that result.

The law of customs administration and procedure, as distinguished 'from the rate structure, enacted in the Tariff Act of 1930 has been generally revised only once, by the Customs Administrative Act of 1938. Since that time many changes have occurred in industry and commerce; and the Customs Simplification Act of 1953 will to a large extent modernize the administrative and procedural laws in accordance with the objective of giving improved service to the importing public at the least possible cost to the taxpayer.

The provisions which are most necessary to achieve these purposes are the following (the references are to sections of the Tariff Act of 1930): to simplify and make more equitable the formulas for appraising merchandise for assessment of ad valorem duties (sec. 402); to eliminate "special marking" requirements and to require only such marking as will indicate to the ultimate purchaser the country of origin of imported merchandise, with additional authority for relief in hardship cases; to authorize the institution of a modern program of internal audit (sec. 523); to eliminate time consuming and cumbersome procedures in connection with warehouse transfers (sec. 557 (b)); to repeal the provision for undervaluation penalties (sec. 489); to provide a more modern method for converting amounts in foreign currencies to amounts in United States currency (sec. 522); to permit correction by customs officers of admitted errors without appeal to the courts (sec. 520 (c) (1)); and a number of others of lesser individual importance, but cumulatively of major importance. The bill proposes no

change in the tariff structure. Any change in amounts of duty payable under it will not be large.

It is the opinion of the Treasury Department that these amendments, if adopted, will go far to remove the more serious obstacles to international trade which result from the procedural and administrative complexities of our customs laws. H. R. 5106 will carry out a specific part of the President's program announced in his state of the Union message; and the Treasury Department wholeheartedly favors its enactment.

In view of the committee's familiarity with this subject as the result of its consideration of a similar but not identical customs simplification bill which passed the House in 1951, I shall, unless the committee desires otherwise, confine my statement to emphasizing the more important sections of H. R. 5106. The summary explanation of H. R. 5106, which was issued by the committee on May 13, 1953, is a factual statement of existing law and the amendments to that law proposed by H. R. 5106 and makes unnecessary a detailed section by section analysis on my part. With the permission of the committee, I should like to offer it for the record, to be included at the end of my statement.

Mr. JENKINS. Without objection it is so ordered. (The document is as follows:)

SUMMARY EXPLANATION OF H. R. 5106, CUSTOMS SIMPLIFICATION ACT OF 1953

(By Committee on Ways and Means, May 13, 1953)

Section 1. Short title and effective date

This section contains a short title, a general provision for an effective date, and a table of contents.

Section 2. Repeal of obsolete accounting provisions

Section 2 (a) of the bill would repeal the following sections of the Revised Statutes, which relate to functions which are either obsolete or are covered by more modern statutes:

(1) Revised Statutes section 2621, as amended (U. S. C., 1946 edition, title 19, sec. 33): This section provides that at ports where there are a collector, comptroller, and surveyor, it shall be the duty of the collector to receive all reports, manifests and documents and to record them, to receive the entries of all ships and of all merchandise imported in them; to estimate the amount of duties payable, to receive all such monies, take bonds, to grant all permits for the unlading and delivery of goods and to provide for the safe keeping of goods.

(2) Revised Statutes section 2622, as amended (U. S. C., 1946 edition, title 19, sec. 34): This section provides that at ports where there are a collector and surveyor only, the collector shall execute all the duties in which the cooperation of the comptroller is requisite.

(3) Revised Statutes section 2623, as amended (U. S. C., 1946 edition, title 19, sec. 35): This section provides that at ports at which there is a collector only, the collector shall execute all the duties prescribed for comptrollers and surveyors.

(4) Revised Statutes section 2626, as amended (U. S. C., 1946 edition, title 19, sec. 39): This section provides that at ports at which there are a collector, comptroller, and surveyor, it shall be the duty of the comptroller to receive copies of all manifests and entries, to estimate, together with the collector, the duties, to keep a separate record of such estimates, and to examine the collector's abstracts of duties and other accounts and certify them as found correct.

(5) Revised Statutes section 2639, as amended (U. S. C., 1946 edition, title 19, sec. 42): This section provides that every collector, comptroller, and surveyor shall keep records of all money received by him and of all expenditures and shall report annually to the General Accounting Office.

(6) Revised Statutes section 2640, as amended (U. S. C., 1946 edition, title 19, sec. 43): This section provides that collectors, comptrollers, and surveyors shall

attend in person at the ports at which their duties are to be performed and shall keep true accounts of all their transactions, shall submit their records to the inspection of persons appointed for that purpose and shall at least monthly transmit their accounts for settlement.

(7) Revised Statutes section 2641, as amended (U. S. C., 1946 edition, title 19, sec. 44): This section provides that every collector, comptroller, and surveyor shall account to the Treasury for all expenses incidental to his office.

(8) Revised Statutes, section 2643, as amended (U. S. C., 1946 edition, title 19, sec. 45): This section provides that every collector, comptroller, and surveyor shall render a list of clerks employed by him, stating the rate of compensation allowed and the duties they perform, together with an account of all sums paid for stationery, fuel and office rent.

Section 2 (b) of the bill would amend section 439 of the Tariff Act of 1930 (U. S. C., 1946 edition, title 19, sec. 1439) by deleting references to the comptroller of customs therein and substituting in lieu thereof a designation of any employee that the Secretary of the Treasury shall designate. Under section 439, masters of vessels arriving at port are required to mail or deliver to the comptroller of customs a copy of the manifest.

Subsection (c) would amend section 440 of the Tariff Act of 1930 (U. S. C., 1946 edition, title 19, sec. 1440) to delete references to the comptroller of customs and subtitute therefor such employee as the Secretary of the Treasury shall designate. Section 440 requires that the master of the vessel mail or deliver to the comptroller of customs any corrections of the manifest.

Section 2 (d) of the bill would amend section 523 of the Tariff Act of 1930 (U. S. C., 1946 edition, title 19, sec. 1523) which provides that comptrollers of customs shall examine the collector's accounts of receipts and disbursements of money and receipts and disposition of merchandise and shall certify these accounts to the Secretary for transmission to the General Accounting Office. It further provides that comptrollers of customs shall verify all assessments of duties and allowances of drawback made by collectors. Subsection (d) would amend section 523 to provide that the Secretary or such officer or employee as he shall designate shall examine the collector's accounts and verify, to the extent the Secretary shall direct, assessments of duties and taxes and allowances of drawback.

Section 3. Effective dates of rates of duty

Section 315 of the Tariff Act (U. S. C., 1946 edition, title 19, sec. 1315) provides that on and after June 18, 1930 all goods, wares and merchandise which are entered shall be subject to the rate of duties imposed by the Tariff Act of 1930. Because of a series of decisions in the customs courts the question of the effective date of rates of duty and when merchandise has been entered, or withdrawn from warehouse, for consumption has become confused. Section 3 of the bill would amend section 315 to provide that merchandise is entered for consumption or withdrawn from warehouse for consumption, within the meaning of the various customs laws, proclamations, and regulations thereunder, when the documents comprising the entry and any estimated or liquidated duties then required to be paid have been deposited with the appropriate customs officers in the form and manner prescribed by regulations of the Secretary of the Treasury and to provide that the applicable rate of duty will be that in effect when the entry or withdrawal has taken place by the performance of those acts. In the case of merchandise entered for transportation in bond under section 552 of the Tariff Act from the port of importation to another port for entry, section 3 provides that the rate of duty will be that in effect when the entry for immediate transportation is accepted by the collector at the port of importation, provided there is no delay in making entry or other factor at the port of destination which requires the collector at that port to take the merchandise into his custody under section 490 of the Tariff Act, and provided the merchandise is not subject to a quota.

Section 3 would also amend section 484 (f) of the Tariff Act (U. S. C., 1946 edition, title 19, sec. 1484 (f)) to provide that in the case of merchandise transported in bond under section 552 and not subject to a quota that the entry may be made for the entire quantity of merchandise covered by the transportation entry after any part of the shipment has arrived at the port of destination. It would also authorize merchandise entered for transportation in bond under section 552, to be transported to any place approved by the collector of customs in charge of the port of destination, with the right to file entry at that port for the entire shipment upon the arrival of any part of the shipment at the place to

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