Proposed Rule2026-04599
Dairy Tariff-Rate Quota Import Licensing Program
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 9, 2026
Issuing agencies
Agriculture DepartmentForeign Agricultural Service
Abstract
This proposed rule would amend the regulation that provides for the issuance of annual licenses to import certain dairy articles under tariff-rate quotas (TRQs) as set forth in the Harmonized Tariff Schedule of the United States. FAS proposes changes to make the regulation more user friendly through updated language and clarification of some provisions. Among other changes, the proposed rule would replace the section on license transfers, strengthen the suspension and revocation provisions, and move forward the surrender date to permit earlier reallocation of surrendered quantities.
Full Text
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[Federal Register Volume 91, Number 45 (Monday, March 9, 2026)]
[Proposed Rules]
[Pages 11174-11181]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04599]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 91, No. 45 / Monday, March 9, 2026 / Proposed
Rules
[[Page 11174]]
DEPARTMENT OF AGRICULTURE
Foreign Agricultural Service
7 CFR Part 6
RIN 0551-AB04
[Docket ID FAS-2026-0001]
Dairy Tariff-Rate Quota Import Licensing Program
AGENCY: Foreign Agricultural Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would amend the regulation that provides
for the issuance of annual licenses to import certain dairy articles
under tariff-rate quotas (TRQs) as set forth in the Harmonized Tariff
Schedule of the United States. FAS proposes changes to make the
regulation more user friendly through updated language and
clarification of some provisions. Among other changes, the proposed
rule would replace the section on license transfers, strengthen the
suspension and revocation provisions, and move forward the surrender
date to permit earlier reallocation of surrendered quantities.
DATES: Comments are due on or before April 8, 2026.
ADDRESSES: You may send comments, by any of the following methods:
Federal eRulemaking Portal: <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the
instructions for sending comments.
Email: <a href="/cdn-cgi/l/email-protection#7216131b000b5f1b1e0132070116135c151d04"><span class="__cf_email__" data-cfemail="086c69617a712561647b487d7b6c69266f677e">[email protected]</span></a>. Include [docket number FAS-2026-0001] in
the subject line of the message.
Mail: Dairy Import Programs, Multilateral Affairs, Trade Policy and
Geographic Affairs, Foreign Agricultural Service, United States
Department of Agriculture; 1400 Independence Avenue SW STOP 1070;
Washington, DC 20250.
Hand Delivery/Courier: Dairy Import Programs, Multilateral Affairs,
Trade Policy and Geographic Affairs, Foreign Agricultural Service,
United States Department of Agriculture; 1400 Independence Avenue SW
STOP 1070; Washington, DC 20250. Instructions: All submissions received
must include the agency name and docket number or Regulatory
Information Number (RIN) for this proposed rule. Comments will be
available for inspection online at <a href="http://www.regulations.gov">www.regulations.gov</a> and at the mail
address listed above between 8 a.m. and 4:30 p.m., Monday through
Friday, except holidays.
FOR FURTHER INFORMATION CONTACT: Elizabeth Riley, International Trade
Specialist, Import Programs, Trade Policy and Geographic Affairs,
Foreign Agricultural Service, U.S. Department of Agriculture, (202)
720-1703; <a href="/cdn-cgi/l/email-protection#2c694045564d4e495844025e454049556c595f484d024b435a"><span class="__cf_email__" data-cfemail="b5f0d9dccfd4d7d0c1dd9bc7dcd9d0ccf5c0c6d1d49bd2dac3">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
The proposed rule has been determined to be not significant under
E.O. 12866 and therefore has not been reviewed by the Office of
Management and Budget (OMB).
Regulatory Flexibility Act
The Regulatory Flexibility Act ensures that regulatory and
information requirements are tailored to the size and nature of small
businesses, small organizations, and small governmental jurisdictions.
The Regulatory Flexibility Act is not applicable to this rule because
FAS is not required by 5 U.S.C. 553 or any other provision of law to
publish a notice of proposed rulemaking with respect to the subject
matter of this rule. Although the RFA does not apply, FAS has
determined that this proposed rule will not have a significant economic
impact on small businesses participating in the program.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
``Civil Justice Reform.'' This rule will not preempt State or local
laws, regulations, or policies unless they represent an irreconcilable
conflict with this rule. The proposed rule would not have a retroactive
effect. Before any judicial action may be brought forward regarding
this proposed rule, all administrative remedies must be exhausted.
Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments.'' Executive Order 13175 requires Federal agencies
to consult and coordinate with Tribes on a government-to-government
basis on policies that have Tribal implications, including regulations,
legislative comments or proposed legislation, and other policy
statements or actions that have substantial direct effects on one or
more Indian Tribes, on the relationship between the Federal Government
and Indian Tribes or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes. FAS has assessed the
impact of this rule on Indian Tribes and determined that this rule does
not, to our knowledge, have Tribal implications that require Tribal
consultation under Executive Order 13175.
National Environmental Policy Act
FAS has determined that this action will not have a significant
effect on the quality of the human environment. Therefore, neither an
Environmental Assessment nor an Environmental Impact Statement is
necessary for this rule.
Unfunded Mandates Reform Act (Pub. L. 104-4)
Public Law 104-4 requires consultation with state and local
officials and Indian tribal governments. This proposed rule does not
impose an unfunded mandate or any other requirement on state, local, or
tribal governments. Accordingly, these programs are not subject to the
provisions of the Unfunded Mandates Reform Act.
Executive Order 12630
This Executive Order requires careful evaluation of governmental
actions that interfere with constitutionally protected property rights.
This rule does not interfere with any property rights and, therefore,
does not need to be evaluated on the basis of the criteria outlined in
Executive Order 12630.
Government Paperwork Elimination Act
The United States Department of Agriculture (USDA) is committed to
compliance with the Government Paperwork Elimination Act, which
requires Government agencies, in general, to provide the public the
option
[[Page 11175]]
of submitting information or transacting business electronically to the
maximum extent possible.
Paperwork Reduction Act
In accordance with provisions of the Paperwork Reduction Act of
1995, the information collection for the Dairy TRQ Import Licensing
program is approved by OMB under OMB control number 0551-0001, expiring
January 31, 2027.
Background
The Foreign Agricultural Service (FAS), under a delegation of
authority from the Secretary of Agriculture, through the Under
Secretary for Trade and Foreign Agricultural Affairs, administers the
Dairy Tariff-Rate Quota Import Licensing regulation, codified at 7 CFR
6.20 et seq., that provides for the issuance of licenses to import
certain dairy articles under tariff-rate quotas (TRQs) as set forth in
certain notes in Chapter 4 of the Harmonized Tariff Schedule of the
United States. These dairy articles may only be entered into the United
States at the low-tier tariff by or for the account of a person, as
defined in the regulation, to whom such licenses have been issued and
only in accordance with the terms and conditions of the regulation.
Licenses are issued on a calendar year basis, and each license
authorizes the licensee to import a specified quantity and type of
dairy article from a specified country of origin.
Under TRQs, a low tariff rate, commonly referred to as the in-quota
rate, applies to imports up to a specified quantity. A higher tariff
rate, commonly referred to as the over-quota rate, applies to any
imports in excess of that amount. No license is required to import
products at the over-quota tariff rate.
USDA issues three types of annual licenses: historical,
nonhistorical (lottery), and designated. For all three license types,
the current regulation provides that persons must apply each year
between September 1 and October 15 to receive a license for the
following quota year. Historical and designated licensees may apply for
lottery licenses, subject to certain limitations, if they are not
affiliated or associated with another company holding a license for
that same item from the same country of origin.
Licensees may fail to qualify for a license for a specific item
from a specific country in the following year if they do not meet
certain requirements, including but not limited to the following:
licensees must (i) apply for the license each year, (ii) pay an annual
fee, and (iii) have imported at least 85 percent of the final license
amount from the previous year. To avoid ineligibility due to the 85
percent rule, licensees may surrender up to 100 percent of the license,
but must import 85 percent of any quantity not surrendered. Section
6.25(b) of the regulation provides that any historical licensee who has
surrendered more than 50 percent of the license amount for the same
item from the same country during at least three of the most recent
five years will be issued a license thereafter in an amount equal to
the average amount imported under that license for those five quota
years.
Summary of Proposed Changes to Rule
The following is a summary of the proposed substantive changes to
the current regulation:
Changes Throughout the Subpart
This rule proposes several changes throughout the subpart to update
terminology and make the regulations more user friendly. These changes
include directly addressing applicants and licensees using the term
``you'' rather than a ``person'' or ``a licensee.'' In addition, the
rule would update all references to the former DAIRIES system to refer
instead to its replacement, the Agriculture Trade License
Administration System (ATLAS).
Throughout this subpart, references to various appendices that
formerly were published in the CFR, but are now published only in the
Federal Register as appendices to a Notice, would be removed to avoid
confusion. In addition, the amended subpart would use the simpler term
``non-cheese product'' instead of ``article other than cheese or cheese
product.''
Overview of Section-by-Section Changes
Section 6.20, Introduction, would be streamlined and updated to
clarify the authority and purpose of the program.
Section 6.21, Definitions, would be updated to include several
modifications. The term ``article'' would be changed to ``dairy
article'' and simplified to include all dairy products subject to a
dairy import license under specific HS codes. The term ``dairy
product'' would be clarified to include dairy products not subject to
dairy import licensing requirements. Additional proposed changes
include adding a definition for ``Days'' to mean calendar days, except
where specified in the subpart. The definition of ``EC'' would be
updated to ``EU 27'' to reference the countries listed in the HTS. FAS
proposes a clear definition of force majeure. FAS proposes adding a
definition for ``Non-cheese article'' to clarify the term as it is
referenced elsewhere in the subpart. FAS also proposes changing
``Process or processing'' to ``processed'' and ``Tariff-rate quota
amount or TRQ amount'' to ``Tariff-rate quota or TRQ'' to simplify and
clarify those definitions.
Section 6.22, Requirement for a license, would be modified to
address more specifically who may obtain a license.
In Section 6.23, Eligibility to apply for a license, FAS proposes
to modify subparagraph (a) to include requirements for ``suitable
business facilities'' and maintaining up-to-date contact details in
ATLAS.
Section 6.23(c) would be modified to clarify what is meant by
``affiliated'' applicants.
Section 6.24, Application for a license, would be reorganized for
clarity and modified to include, among other requirements for an
application, an address for physical business facilities, a tax
identification number, and a certification that the applicant is not
affiliated with another applicant that is applying for a nonhistorical
license for the same dairy article from the same country.
Section 6.25, Allocation of licenses, would be updated to clarify
the language for the allocation of historical, non-historical, and
designated licenses, and to remove references to past suspensions of
the historical license reduction provision that are no longer in
effect. In order to maximize the utilization of designated quotas, the
rule would add a provision allowing for the reallocation of designated
quantities in the event that a country fails to notify USDA of its
designated companies for the following quota year by an October 31
deadline. In addition, (d) was deleted to remove confusion about the
applicable deadlines for countries to designate companies.
To permit reallocations earlier in the quota year, FAS proposes
amending Section 6.26, Surrender and reallocation, to reflect a new
deadline for surrender of unused quantities and a new timeframe for
applications for reallocation. As modified, the final date to surrender
license quantities would be September 1, rather than October 1, and the
window to apply for reallocated quantities would be modified to August
1 through August 15, rather than September 1 through September 15.
These changes would allow additional time for licensees to utilize
quantities received through reallocation.
In addition to updating the language in Section 6.27, Limitations
on use of license, the proposed rule would remove the requirement that
eligible manufacturers and processors process at least 75 percent of
licensed imports in
[[Page 11176]]
their own facilities. The proposed rule would replace current section
6.28, Transfer of license, with a new provision governing how USDA will
address changes to the name or business entity of the license holder
when the ownership of the business has not changed. The new Section
6.28 would not allow for the transfer of any licenses in the event a
business or division of a business is sold, merged, or otherwise
conveyed to another person. A license permits the licensee to import
under the tariff-rate quota (TRQ). The basis for historical licenses is
that those eligible for such licenses are entities that were in the
business of importing dairy articles before the TRQ was established. In
the case of a non- historical or designated license holder, the license
was issued to that specific individual or entity. Once a license holder
ceases to operate as a historical, non-historical, or designated
importer, the entity ceases to qualify for a dairy license, and USDA
may reallocate the quantities covered by the license. This change is
intended to result in greater utilization of the dairy import TRQ and
to enable a greater number of participants to utilize the TRQs. In
particular, by no longer providing for the transfer of historical
licenses, the revised regulation would allow quantities previously
available only to historical license holders to become available to
other applicants.
Section 6.30 would be modified to clarify that licensees must
provide license records to USDA officials upon request during the 5-
year period following the end of a quota year.
The proposed rule would change the name of Section 6.31, Debarment
and Suspension, to ``Debarment, suspension, and revocation.'' The
revised Section 6.31 retains the existing reference to the USDA
Suspension and Debarment Regulations at 2 CFR 417 and adds a citation
to the Governmentwide Nonprocurement Suspension and Debarment
Regulations at 2 CFR 180, as the dairy TRQ import licenses are
``covered transactions'' under the suspension and debarment
regulations. In addition, revised Section 6.31 would specify the
circumstances under which the Licensing Authority may suspend or revoke
a license for violations of or failure to comply with the regulations
set forth in this subpart. These changes will enable FAS to ensure
compliance with the regulations and protect the integrity of the
license program.
Section 6.33, ``License fee,'' would be modified to include the
current payment method of <a href="http://pay.gov">pay.gov</a>.
Section 6.34, Adjustment of appendices, would add a new
subparagraph to explain the TRQ allotment and Appendices 1-4, which are
published as notices in the Federal Register.
Section 6.35(b), ``Correction of errors,'' would be modified to
move the deadline for reporting errors from August 31 to March 31 of
the calendar year following the year in which the error was alleged to
have occurred.
Section 6.36, ``Miscellaneous,'' would be modified to clarify that
a document is filed on a day when it is received by 11:59 p.m., Eastern
Time, and to note that all official correspondence, except where
otherwise noted in the subpart, will be via email.
List of Subjects in 7 CFR Part 6
Agricultural commodities, Application requirements, Dairy cheese,
Imports, Procedural rules, Tariff-rate Quota, Reporting and
recordkeeping requirements.
Accordingly, for reasons described in the preamble, 7 CFR part 6 is
proposed to be amended as follows:
PART 6--IMPORT QUOTAS AND FEES
Subpart B--Dairy Tariff-Rate Quota Import Licensing
0
1. The authority citation for Subpart B--Dairy Tariff-Rate Quota Import
Licensing is revised to read as follows:
Authority: 19 U.S.C. 3513; 19 U.S.C. 3601; additional U.S. notes
6, 7, 8, 12, 14, 16-23 and 25 to Chapter 4 of the Harmonized Tariff
Schedule of the United States (19 U.S.C. 1202); 31 U.S.C. 9701,
Proc. 6763, 3 CFR, 1994 Comp., p. 147; Proc. 7235, 64 FR 55611
(October 13, 1999).
0
2. Sections 6.20 through 6.36 are revised to read as follows:
Sec. 6.20 Introduction.
(a) The Department of Agriculture will apply the regulations in
this subpart to administer an import licensing system for certain dairy
articles that are subject to in-quota tariff rates proclaimed in the
Harmonized Tariff Schedule of the United States (HTS) (19 U.S.C. 1202).
(b) The dairy articles subject to this licensing system are listed
in additional U.S. notes 6, 7, 8, 12, 14, 16-23 and 25 to Chapter 4 of
the HTS. The Department annually publishes the list of dairy articles
subject to licensing under this subpart in Appendices 1, 2, 3 and 4 in
the Federal Register.
(c) Licenses permit the holder to import specified quantities of
the subject dairy article into the United States at the applicable in-
quota rate of duty. If an importer does not have a license for a dairy
article subject to licensing, such importer will generally be required
to pay the applicable over-quota rate of duty.
Sec. 6.21 Definitions.
In this subpart:
ATLAS means the Agricultural Trade License Administration System, a
web-based user interface system that persons must utilize to apply for
and manage licenses, or any successor system designated by the
Department.
CBP means the United States Customs and Border Protection, U.S.
Department of Homeland Security.
Cheese or cheese articles means articles subject to a dairy import
license as described in additional U.S. notes 16-23 and 25 to Chapter 4
of the HTS.
Commercial entry means any entry except those made by or for the
account of the United States Government or for a foreign government,
for the personal use of the importer or for sampling, taking orders,
research, or the testing of equipment.
Country means country of origin as determined in accordance with
CBP rules and regulations, except that ``EU 27'' and ``Other countries
or areas'' will each be treated as a country.
Dairy article means a product subject to a dairy import license as
described in additional U.S. notes 6-8, 12, 14, 16-23 and 25 to Chapter
4 of the Harmonized Tariff Schedule.
Dairy products means products in headings 0401 through 0406,
margarine cheese listed under subheadings 1901.90.34 and 1901.90.36,
ice cream listed under heading 2105, and casein listed under heading
3501 of the Harmonized Tariff Schedule.
Days means calendar days. If any deadline date in this subpart
falls on a Saturday, Sunday, or a Federal holiday, then the deadline
will be the next business day.
Department means the United States Department of Agriculture.
EU 27 means, collectively, those countries listed in additional
U.S. note 2 to Chapter 4 of the HTS.
Enter or Entry means the entry for consumption, or withdrawal from
warehouse for consumption, of merchandise imported into the United
States in accordance with CBP regulations and procedures.
Force majeure means severe weather conditions, fire, explosion,
flood, earthquake, insurrection, riot, strike, labor dispute, act of
civil or military authority, non-availability of transportation
facilities, or any other cause beyond the control of the licensee that
renders the ability to make entry on a license impossible.
Harmonized Tariff Schedule or HTS means the Harmonized Tariff
Schedule of the United States.
[[Page 11177]]
Licensee means a person to whom a license has been issued under
this subpart.
Licensing Authority means the officer or employee of the Department
who has been duly designated as the Licensing Authority responsible for
managing the Dairy Tariff-Rate Quota Import Licensing System.
Non-cheese articles means articles subject to a dairy import
license as described in additional U.S. notes 6-8, 12, and 14 to
Chapter 4 of the HTS.
Person means an individual, firm, corporation, partnership,
association, trust, estate, or other legal entity.
Processed means any additional preparation of a dairy product, such
as melting, grating, shredding, cutting and wrapping, or blending with
any additional ingredient.
Quota year means the 12-month period beginning on January 1 of a
given year.
Tariff-rate quota or TRQ means a quota that permits a specified
quantity of imported merchandise to be entered at a reduced rate of
duty during the quota period.
United States means the customs territory of the United States,
which is limited to the 50 states, the District of Columbia, and Puerto
Rico.
You means a person who is an applicant or licensee under this
subpart.
Sec. 6.22 Requirement for a license.
If you seek to enter a dairy article as a commercial entry at the
preferential in-quota tariff rate you must obtain a license in
accordance with this subpart.
Sec. 6.23 Eligibility to apply for a license.
(a) Generally. To be eligible for any license, you must have
suitable U.S. business facilities, to include an office in the United
States, with appropriate record-keeping and inventory systems, and a
U.S.-based agent for service of process. You also must continuously
maintain a valid email address in ATLAS for use in communicating with
the Licensing Authority.
(b) Eligibility.
(1) Historical licenses. If the Licensing Authority issued you a
historical license for a dairy article for the current quota year, you
will be eligible to apply for a historical license for the next quota
year for the same dairy article from the same country in the same
amount if, during the 12-month period ending August 31 prior to the
quota year for which the license is being sought, you were either:
(i) Where the dairy article is cheese or cheese article,
(A) The owner of and importer of record for at least three separate
commercial entries of cheese or cheese products under heading 0406 or
products entered under subheading 1901.90.34 or 1901.90.36 of the HTS
totaling not less than 57,000 kilograms net weight, each of the three
entries not less than 2,000 kilograms net weight;
(B) The owner of and importer of record for at least eight separate
commercial entries of cheese or cheese products under heading 0406 or
products entered under subheading 1901.90.34 or 1901.90.36 of the HTS,
from at least eight separate shipments, totaling not less than 19,000
kilograms net weight, each of the eight entries not less than 450
kilograms net weight, with a minimum of two entries in each of at least
three quarters during that period; or
(C) The owner or operator of a plant listed in Section II or listed
in Section I as a processor of cheese of the most current issue of
``Dairy Plants Surveyed and Approved for USDA Grading Service'' and had
processed or packaged at least 450,000 kilograms of cheese or cheese
products in your own plant in the United States; or
(ii) Where the dairy article is a non-cheese article,
(A) The owner of and importer of record for at least three separate
commercial entries of dairy products totaling not less than 57,000
kilograms net weight, each of the three entries not less than 2,000
kilograms net weight;
(B) The owner of and importer of record for at least eight separate
commercial entries of dairy products, from at least eight separate
shipments, totaling not less than 19,000 kilograms net weight, each of
the eight entries not less than 450 kilograms net weight, with a
minimum of two entries in each of at least three quarters during that
period; or
(C) The owner or operator of a plant listed in the most current
issue of ``Dairy Plants Surveyed and Approved for USDA Grading
Service'' and had manufactured, processed or packaged at least 450,000
kilograms of dairy products in your own plant in the United States; or
(D) The exporter of dairy products in the quantities and number of
shipments required under (A) or (B) above.
(2) Nonhistorical licenses for cheese or cheese articles. You will
be eligible to annually apply for a nonhistorical license for cheese or
cheese articles if you meet the requirements of paragraph (b)(1)(i) of
this section.
(3) Nonhistorical licenses for non-cheese articles. You will be
eligible to apply annually for a nonhistorical license for non-cheese
articles if you meet the requirements of paragraph (b)(1)(ii) of this
section.
(4) Designated license. You will be eligible to apply annually for
a designated license if you meet the requirements of paragraph
(b)(1)(i) of this section and the government of a country designates
you for such license under Sec. 6.25(d).
(b) Exceptions
(1) If you have a license in the current quota year and fail in the
current quota year to enter at least 85 percent of the amount of the
dairy article permitted under the license, you will not be eligible to
receive a license for the same dairy article from the same country for
the next quota year. For purposes of this paragraph, the amount of a
dairy article permitted under the license will exclude any amounts
surrendered under Sec. 6.26(a), but will include any additional
allocations received under Sec. 6.26(b).
(2) Paragraph (c)(1) of this section will not apply where you
demonstrate to the satisfaction of the Licensing Authority that the
failure to enter the requisite 85 percent resulted from:
(i) breach by a carrier of its contract of carriage,
(ii) breach by a supplier of its contract to supply the dairy
article, or
(iii) force majeure.
(3) Paragraph (c)(1) of this section will not apply in the case of
historical or nonhistorical license holders where you demonstrate to
the satisfaction of the Licensing Authority that the country specified
on the license maintains or permits an export monopoly to control the
dairy article concerned and you petition the Licensing Authority to
waive this requirement before October 15 of the quota year preceding
the quota year for which you are applying for a new license. To
petition the Licensing Authority, you must submit evidence that the
country maintains or permits an export monopoly, defined for purposes
of this paragraph as a privilege granted by the government to one or
more persons consisting of the exclusive right to carry on the
exportation of any dairy article from a country to the United States.
(4) The Licensing Authority will not issue you a nonhistorical
license for a dairy article from a country for the upcoming quota year
if you are affiliated with another applicant that is applying for a
nonhistorical license for the same dairy article from the same country
for that quota year. Further, the Licensing Authority will not issue a
nonhistorical license for butter to an applicant who is affiliated with
another applicant to whom the Licensing Authority is issuing a
historical butter license of 57,000 kilograms or greater.
[[Page 11178]]
(5) For purposes of this subpart, applicants will be deemed
affiliates of each other if an applicant would economically benefit,
directly or indirectly, by the other applicant's use of the license to
be issued to the other applicant, either one controls or has the power
to control the other, or a third person controls or has the power to
control both. Indications of control include, but are not limited to,
interlocking management or ownership, identity of interests among
family members, shared facilities and equipment, employment of one
applicant by the other, and common use of employees.
(6) If you receive a designated license for a dairy article, the
Licensing Authority will not issue you a nonhistorical license for the
same dairy article from the same country for the same quota year.
Sec. 6.24 Application for a license.
(a) You must apply for a license using the electronic forms
designated by the Licensing Authority in ATLAS. The Licensing Authority
will not accept incomplete applications. You must complete all parts of
the application form, including providing the following information:
(1) a physical address for your business facilities,
(2) a federal tax ID for doing business in the United States,
(3) an agent in the United States for service of process, and
(4) an email address to be used for correspondence regarding
licensing activities and reports.
(b) If you are applying for a nonhistorical license, you must
submit as part of your application a signed certification that you are
not affiliated with another applicant that is applying for a
nonhistorical license for the same dairy article from the same country
for which you are also applying.
(c) You must submit your application no earlier than September 1
and no later than October 31 of the year preceding that for which the
license application is made.
(d) To establish eligibility on the basis of imports, as part of
your application, you must provide identification of entries sufficient
to establish you were the importer of record of entries required under
Sec. 6.23 during the 12-month period ending August 31 prior to the
quota year for which a license is being sought. For qualifying licensed
entries, verification will be processed through ATLAS and cross-checked
with entries in the CBP system. For both licensed and unlicensed
qualifying entries, you may submit an electronic copy of the applicable
signed CBP Form 7501 to the Licensing Authority.
(e) To establish eligibility on the basis of exports, for the
quantities and number of export shipments required under Sec. 6.23,
during the 12-month period ending August 31 prior to the quota year for
which a license is being sought, you must provide as part of your
application:
(1) an electronic copy of Form 7525-V, Shipper's Export Declaration
(SED) or Electronic Export Information (EEI), and
(2) electronic copies of the commercial invoice, bill of lading, or
bill of sale.
(f) If you are applying for more than one nonhistorical license,
you must rank order these requests by the applicable additional U.S.
note number. You must rank cheese and cheese articles separately from
non-cheese articles.
Sec. 6.25 Allocation of licenses.
(a) Licensing Authority. The Licensing Authority will issue
historical, nonhistorical and designated licenses.
(b) Historical licenses. If you were issued a historical license
for the current quota year, the Licensing Authority will issue you a
historical license in the same amount for the same dairy article from
the same country for the next quota year, assuming you meet the
applicable eligibility and application requirements, except that, if
you surrendered more than 50 percent of such historical license in at
least three of the prior five quota years preceding the quota year for
which you are applying, you will thereafter be issued a historical
license in an amount equal to the average annual quantity entered
during those five quota years.
(c) Nonhistorical licenses. The Licensing Authority will allocate
nonhistorical licenses on the basis of a rank-order lottery system,
which will operate as follows:
(1) The minimum license size will be:
(i) In the case of a cheese or cheese article:
(A) The total amount available for nonhistorical license where such
amount is less than 9,500 kilograms;
(B) 9,500 kilograms where the total amount available for
nonhistorical license is between 9,500 kilograms and 500,000 kilograms,
inclusive;
(C) 19,000 kilograms where the total amount available for
nonhistorical license is between 500,001 kilograms and 1,000,000
kilograms, inclusive;
(D) 38,000 kilograms where the total amount available for
nonhistorical license is greater than 1,000,000 kilograms; or
(E) An amount less than the minimum license size established in
paragraphs (c)(1)(i) (A) through (D) of this section, if requested by
the applicant;
(ii) In the case of a non-cheese article:
(A) The total amount available for nonhistorical license where such
amount is less than 19,000 kilograms;
(B) 19,000 kilograms where the total amount available for
nonhistorical license is between 19,000 kilograms and 550,000
kilograms, inclusive;
(C) 38,000 kilograms where the total amount available for
nonhistorical license is between 550,001 kilograms and 1,000,000
kilograms, inclusive;
(D) 57,000 kilograms where the total amount available for
nonhistorical license is greater than 1,000,000 kilograms; or
(E) An amount less than the minimum license sizes established in
paragraphs (c)(1)(ii)(A) through (D) of this section, if requested by
the applicant.
(2) Taking into account the order of preference submitted by each
applicant pursuant to Sec. 6.24(f), the Licensing Authority will
allocate nonhistorical licenses for a dairy article from a country by a
series of random draws. A license of minimum size will be issued to
each applicant in the order established by such draws until the total
amount of such dairy article available for nonhistorical licenses has
been allocated. If the in-quota quantity for a dairy article reserved
for nonhistorical licenses is not fully allocated, an applicant that
receives a nonhistorical license for the dairy article will be removed
from the pool for subsequent draws until every applicant has been
allocated at least one nonhistorical license. Any amount remaining
after the random draws which is less than the applicable minimum
license size may, at the discretion of the Licensing Authority, be
prorated equally among the nonhistorical licenses awarded for that
dairy article.
(a) Designated licenses.
(1) With respect to a dairy article for which the government of an
applicable country may designate importers to receive licenses, the
government of the applicable country, not later than October 31 prior
to the beginning of a quota year, may submit directly by email to the
Licensing Authority:
(i) The names, addresses and emails of the importers that it is
designating to receive licenses; and
(ii) The amount, in kilograms, of such dairy article for which each
such importer is being designated. Where quantities for designation
result from both Tokyo Round concessions and Uruguay Round concessions,
the designations should be made in terms of each.
[[Page 11179]]
In the event no submission is received by the October 31 deadline,
USDA will reallocate that country's quantity to the non-historical
appendix for that quota year.
(2) To the extent practicable, the Licensing Authority will issue
designated licenses to those importers, and in those amounts, indicated
by the government of the applicable country, provided that the importer
designated meets the applicable eligibility and application
requirements set forth in this subpart. Consistent with the
international obligations of the United States, the Licensing Authority
may disregard a designation if the Licensing Authority determines that
the person designated is not eligible for the reason set forth in Sec.
6.23(c)(1).
Sec. 6.26 Surrender and reallocation.
(a) If you determine that you will not enter the entire amount of a
dairy article permitted under a license issued to you under this
subpart before the end of the relevant quota year, you must surrender
your right to enter the amount that you do not intend to enter.
Surrender must be made to the Licensing Authority no later than
September 1. Any surrender will be final and will be only for that
quota year, except for historical licenses as provided in Sec.
6.25(b). The amount of the license not surrendered will be subject to
the license use requirements of Sec. 6.23(c)(1).
(b) For each quota year, the Licensing Authority will, to the
extent practicable, reallocate any amounts surrendered.
(c) If you are qualified for or were issued a cheese or cheese
article license for the quota year, you may apply for a license or
additional amounts to an existing license, as applicable, for a portion
of the amount of any cheese or cheese article quota being reallocated.
If you are qualified for or were issued a non-cheese article license
for the quota year, you may apply for a license or additional amounts
to an existing license, as applicable, for a portion of the amount of
any non-cheese article quota being reallocated.
(d) If you wish to apply for any amounts surrendered, you must
submit to the Licensing Authority no earlier than August 1 and not
later than August 15 using the electronic forms designated by the
Licensing Authority in ATLAS an application in accordance with section
6.24. The application must further specify:
(1) Your company name.
(2) The dairy article and country requested, the applicable HTS
additional U.S. note number and, if you are requesting more than one
dairy article, a rank-order by additional U.S. note number; and
(3) If applicable, the number of the license issued to you for that
quota year permitting entry of the same dairy article from the same
country you are requesting.
The Licensing Authority will not accept incomplete applications.
You must complete all parts of the application form.
(e) The Licensing Authority will reallocate surrendered amounts
among applicants as follows:
(1) The minimum license size, or addition to an existing license,
will be the total amount of the dairy article from a country
surrendered, or 10,000 kilograms, whichever is less;
(2) Minimum size licenses, or additions to an existing license,
will be allocated among applicants requesting dairy articles on the
basis of the rank-order lottery system described in Sec. 6.25(c);
(3) If there is any amount of a dairy article from a country left
after minimum size licenses have been issued, the Licensing Authority
may allocate the remainder in any manner it determines, including on a
first-come, first-served basis; and
(4) No amount will be reallocated to a licensee who has surrendered
a portion of its license for the same dairy article from the same
country during that quota year and has applied for a reallocation for
that same dairy article from the same country until all other
applicants applying for a reallocated quantity of that TRQ have been
allocated their requested amounts.
(f) If the government of an exporting country with a right to
designate importers chooses to designate eligible importers to receive
amounts surrendered by designated license holders for that country, the
Licensing Authority will issue the designated licenses for the
reallocated amounts in accordance with 6.25(d)(2), provided that the
government of the exporting country notifies the Licensing Authority of
its designations no later than August 1. Such notification must contain
the names, addresses, and email addresses of the importers that it is
designating and the share of the quantity of such dairy articles for
which each importer(s) is being designated. In such case the
requirements of paragraph (c) of this section will not apply.
Sec. 6.27 Limitations on use of license.
You must not obtain or use a license for speculation or brokering.
You must not sell a license issued to you by the Licensing Authority or
permit any other person to use such license.
Sec. 6.28 Change in business entity.
If you change your business name or entity type (e.g., from a
limited liability corporation (LLC) to a corporation), but the
ownership of the business has not changed, you must provide the
Licensing Authority with supporting documents for the new business
entity within 10 business days of the change in order for the Licensing
Authority to update this information in ATLAS. Entries made under
licenses by the original entity will be considered as having been made
by the new business entity to whom the Licensing Authority issued the
license for purposes of determining the new business entity's
eligibility for the next quota year in accordance with Sec. 6.23.
Sec. 6.29 Use of licenses.
(a) The country of origin of a dairy article entered under a
license must be the country specified on the license, as determined by
CBP.
(b) A dairy article entered or withdrawn from warehouse for
consumption under a license must be entered in the name of the licensee
as the importer of record by the licensee or its agent and must be
owned by the licensee at the time of such entry.
(c) If the dairy article entered or withdrawn from warehouse for
consumption was purchased by the licensee through a direct sale from a
foreign supplier, the licensee must present the following documents or
their authorized electronic equivalent, when available, at the time of
entry:
(1) A true and correct copy of a through bill of lading from the
country; and
(2) A commercial invoice or bill of sale from the seller, showing
the quantity and value of the dairy article, the date of purchase and
the country of origin; or
(3) Where the dairy article was entered into warehouse by the
foreign supplier, CBP Form 7501 endorsed by the foreign supplier and
the commercial invoice or bill of sale, from the seller to the buyer.
(d) If the dairy article entered was purchased by the licensee via
sale-in-transit, the licensee must present the following documents or
their authorized electronic equivalent, when available, at the time of
entry:
(1) A true and correct copy of a through bill of lading endorsed by
the original consignee of the goods;
(2) A certified copy of the commercial invoice or bill of sale from
the foreign supplier to the original consignee of the goods; and
[[Page 11180]]
(3) A commercial invoice or bill of sale from the original
consignee to the licensee.
(e) If the dairy article entered was purchased by the licensee in
warehouse, the licensee must present the following documents or their
authorized electronic equivalent, when available, at the time of entry:
(1) CBP Form 7501 endorsed by the original consignee of the goods;
(2) A certified copy of the commercial invoice or bill of sale from
the foreign supplier to the original consignee of the goods; and
(3) A commercial invoice or bill of sale from the original
consignee to the licensee.
(f) The Licensing Authority may waive the requirements of
paragraphs (c), (d) or (e), if it determines that because of strikes,
lockouts or other unusual circumstances, compliance with those
requirements would unduly interfere with the entry of such dairy
articles.
(g) Nothing in this subpart will prevent the use of immediate
delivery in accordance with the provisions of CBP regulations relating
to tariff-rate quotas.
Sec. 6.30 Record maintenance and inspection.
You must retain all records relating to purchases, sales, and
transactions governed by this subpart, including all records necessary
to establish your eligibility, for five years following the end of the
quota year in which such purchases, sales, or transactions occurred.
During that period, you must, upon reasonable notice and during
ordinary hours of business, grant officials of the Department full and
complete access to your premises to inspect, audit, or copy such
records. During that period, you must, upon request, promptly provide
to officials of the Department copies of such records that have been
requested by them.
Sec. 6.31 Debarment, suspension, and revocation.
(a) The debarment and suspension regulations in 2 CFR part 180 and
2 CFR part 417 apply to this subpart.
(b) The Licensing Authority may suspend or revoke a license for a
quota year and may not issue a license to a person for up to three
subsequent quota years for any violation of or failure to comply with
any provision of these regulations, including, but not limited to, the
following:
(1) Failure to pay a license fee in accordance with Sec. 6.33;
(2) Submission of false or misleading information in connection
with an application, the use of a license, or a request for information
under this subpart;
(3) Failure to observe the limitations on and proper use of the
license as set out in this subpart;
(4) Failure to maintain appropriate records or provide requested
records during the required period of time in accordance with Sec.
6.30; and
(5) The person is owned, controlled, employed, or managed by a
person whose license has been suspended or revoked.
(c) The Licensing Authority will determine whether to suspend or
revoke a license under paragraph (b) and, except in cases of
willfulness or when public health, interest, or safety requires
otherwise, will give written notice of such determination to the
licensee. The notice will give a plain and concise explanation of the
factual basis and grounds for the determination, specify the length of
suspension or revocation and a date on which such suspension or
revocation will become effective. If such opportunity has not already
been provided, the notice will provide the licensee an opportunity to
demonstrate or achieve compliance with all lawful requirements.
(d) Any action taken by the Licensing Authority to suspend or
revoke a license is without prejudice to the rights of the U.S.
Government to pursue any other available legal recourse, civil,
criminal, or administrative.
Sec. 6.32 Globalization of licenses.
If the Licensing Authority determines that entries of a dairy
article from a country are likely to fall short of that country's total
allocated amount under the relevant TRQ, the Licensing Authority may
permit, with the approval of the Office of the United States Trade
Representative, the applicable licensees to enter the remaining balance
or a portion thereof from any country during that quota year. Requests
by licensees for consideration of such adjustments must be submitted to
the Licensing Authority no later than September 1. The Licensing
Authority will obtain prior consent for such an adjustment of license
quantities from the government of the exporting country consistent with
the relevant international commitments of the United States. No
globalization requests will be considered prior to April 1 of each
year.
Sec. 6.33 License fee.
(a) A fee will be assessed each quota year for each license based
on the Department's costs of administering the licensing system. To the
extent practicable, the fee will be announced annually by the Licensing
Authority in a notice published in the Federal Register no later than
August 31 of the year preceding the quota year for which the fee is
assessed.
(b) The license fee for each license issued is due and payable in
full no later than March 15 of the year for which the license is
issued. The fee for any license issued after March 15 of any quota year
is due and must be paid in full no later than 10 days from the date of
issuance of the license. Fee payments are payable to the Treasurer of
the United States and must be made via the <a href="http://pay.gov">pay.gov</a> link provided in the
ATLAS system.
(c) If you do not pay the license fees for all licenses issued to
you in full by the applicable due dates, a hold will be placed on the
use of all licenses issued to you and no dairy article will be
permitted entry under those licenses. The Licensing Authority will send
you a warning by email advising that if payment is not made in
accordance with subparagraph (b) above and received within 10 days from
the date of the email, all licenses issued to you will be revoked.
Where the license at issue is a historical license, this will result,
pursuant to Sec. 6.23(b), in the person's permanent loss of
eligibility for such historical license.
Sec. 6.34 Adjustment of appendices.
(a) The Department will annually publish the list of dairy articles
and the portion of each TRQ allotted to historical, nonhistorical, and
designated licenses in the Federal Register in Appendix 1 (historical
licenses), Appendix 2 (nonhistorical licenses), Appendix 3 (designated
licenses per Tokyo Round concessions), and Appendix 4 (designated
licenses per Uruguay Round concessions).Whenever quantities of a
historical license are permanently surrendered, revoked by the
Licensing Authority, or not issued to an applicant pursuant to the
provisions of Sec. 6.23, such quantity will be transferred to the
quantity available to nonhistorical licenses for that dairy article.
(b) The cumulative annual transfers to nonhistorical licenses made
in accordance with paragraph (b) of this section will be published in
the Federal Register each year. If a transfer results in the addition
of a new dairy article, or a dairy article from a country not
previously listed in Appendix 2, the Licensing Authority will afford
all eligible applicants for the current quota year the opportunity to
apply for a nonhistorical license for such dairy article during the
reallocation period.
[[Page 11181]]
Sec. 6.35 Correction of errors and explanation of denial.
(a) If you demonstrate, to the satisfaction of the Licensing
Authority, that errors were made by officers or employees of the United
States Government in implementing this subpart, the Licensing Authority
will review and rectify the errors to the extent feasible and permitted
under this subpart.
(b) You must provide sufficient documentation regarding the error
to the Licensing Authority by email as soon as practicable after you
become aware of the error but no later than by March 31 of the calendar
year following the calendar year in which the error was alleged to have
been committed.
(c) If the error resulted in the loss of a historical license by a
license holder, the Licensing Authority will transfer the amount of
such license from the amounts available to the nonhistorical licenses
back to the amounts available to historical licenses in order to
provide for the issuance of such license in the calendar year following
the calendar year for which the license was revoked.
(d) At the request of the applicant, the Licensing Authority will
provide a written explanation for the denial of a license application
within 45 days of receiving the request.
Sec. 6.36 Miscellaneous.
(a) If any deadline date in this subpart falls on a Saturday,
Sunday, or a Federal holiday, then the deadline will be the next
business day. A document is filed on a day when it is received by 11:59
p.m., Eastern Time.
(b) All official correspondence with the Licensing Authority,
except as provided otherwise in this subpart, must be by email. Digital
scanned versions (e.g., PDF, JPEG, TIF, etc.) of hardcopy documents
submitted by email are acceptable electronic communications.
Daniel B. Whitley,
Administrator, Foreign Agricultural Service.
[FR Doc. 2026-04599 Filed 3-6-26; 8:45 am]
BILLING CODE 3410-10-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.