tion shall be deemed as one country of origin.

Eligible applicant means a person applying for a license to enter an article who has established, to the satisfaction of the Licensing Authority, eligibility to enter such article, in accordance with §6.25.

Enter means to make entry, or withdrawal from warehouse, for consumption by deposit with, and acceptance by, the appropriate Customs officer of the properly executed entry documents, including invoices, bills of lading and payment of estimated duties.

Entire dairy products business means the total assets and operations of the foreign and domestic aspects of a business pertaining to articles subject to the provisions of this regulation.

Entrepreneurial use means the processing or sale of the article entered pursuant to the license as a part of the ordinary conduct of business by a licensee who is managing and assuming the risk of such business. Such term does not include one who is functioning as a mere supplier of license.

Harmonized Tariff Schedule means the Harmonized Tariff Schedule of the United States.

Licensee means any person to whom a license has been issued under the regulation.

Licensing Authority means the Dairy Import Quota Manager, Import Policies and Programs Division, Foreign Agricultural Service, U.S. Department of Agriculture, or any other officer or employee of the Department acting in his or her behalf.

Other countries refers to countries sharing a common tariff-rate quota which are not listed as having separate tariff-rate quota allocations in the Additional U.S. Notes to Chapter 4 of the Harmonized Tariff Schedule and for the purposes of the regulation are deemed as one country of origin.

Person includes any individual, firm, corporation, partnership, association, or other legal entity. It also includes any national government (other than the Government of the United States and any agency thereof).

Postmark means the postage cancellation mark applied by the U.S. Post Office showing the post office and date of mailing. This does not include metered

postage affixed by the applicant or any other private entity.

Quota means the articles and quantities of such articles subject to an inquota rate of duty provided for in the Additional U.S. Notes to Chapter 4 of the Harmonized Tariff Schedule and covered by this regulation.

Quota share means that part of the annual tariff-rate quota of an article listed in appendix 1, appendix 2, or appendix 3 of this subpart for which a person is eligible.

Quota year means the 12-month period beginning on January 1 of any given year.

Regulation means the provisions contained in the Licensing Regulation of this subpart.

United States means the Customs Territory of the United States, which is limited to the United States, the District of Columbia and Puerto Rico.

[60 FR 1990, Jan. 6, 1995]

§6.22 Prohibitions and restrictions on importers.

(a) No person may enter or cause to be entered any article listed in Appendix 1, Appendix 2, or Appendix 3, except as provided in §6.23 or as authorized by a license issued pursuant to this regulation.

(b) A person to whom a license has been issued hereunder is not relieved from compliance with any requirement of this regulation or any other applicable laws and regulations.

[44 FR 75596, Dec. 20, 1979, as amended at 60 FR 1991, Jan. 6, 1995]

$6.23 Exceptions.

Licenses are not required for the entry of:

(a) Products imported by or for the account of any agency of the U.S. Government.

(b) Products imported for the personal use of the importer, provided that the net quantity of such product in any one shipment does not exceed five kilograms.

(c) Products, which will not enter the commerce of the United States, imported as samples for taking orders, for exhibition, display or sampling at a trade fair, for research, for use by embassies of foreign governments or for

testing of equipment, provided that written approval of the Licensing Authority is obtained.

[60 FR 1991, Jan. 6, 1995] ·

$6.24 Application for license.

Applications of the Licensing Authority for the issuance of licenses to enter articles must be made in writing, addressed to the Import Licensing Group, Room 5531-S, Import Policies and Programs Division, Foreign Agricultural Service, U.S. Department of Agriculture, Washington, D.C. 202501000. Each application must indicate the Additional U.S. Note number of the Harmonized Tariff Schedule and the country of origin of the article. Unpostmarked applications will not be approved by the Licensing Authority.

[60 FR 1991, Jan. 6, 1995]

$6.25 Eligibility.

(a) Historical eligibility. Historical eligibility for licenses to enter in-quota shares of articles subject to tariff-rate quotas which are shown in appendix 1 and appendix 2 of this subpart, has already been established.

(b) Nonhistorical eligibility. (1) Any person, who is not eligible under paragraph (a) of this section to receive a historical license to enter a particular article in appendix 1 or appendix 2, or has voluntarily surrendered such eligibility, who meets the requirements of this paragraph, will be eligible to obtain a nonhistorical license to enter a quota share of such article in appendix 1.

(2) Nonhistorical eligibility for specific articles listed in appendix 1 will be established upon submission of:

(i) A notarized certification sworn to by the applicant under penalty of perjury stating that: (A) Such person intends to be regularly engaged, during the period covered by the license(s) for which application is made, in the business of manufacturing within the United States or entering such articles for his or her own entrepreneurial use and for this purpose will maintain bonafide business office within the United States and have a person, principal or resident agent upon whom service of judicial process may be made; (B) such person intends to use

a

any article entered pursuant to a license obtained hereunder in actual commerce and, when required will submit proof demonstrating the use to which licenses and the articles entered pursuant thereto have been made; (C) such person is not a part of or an affiliate of the business of any other person eligible for a license for the article(s) for which application for license is made, and is not an associate of the business of such other person;

(ii) A list of the person(s) holding an ownership interest of 5 percent or more in the applying firm (if other than an individual) showing the percent of ownership held by each such person; and

(iii) In addition, in the case of application for license(s) to enter any article(s) under Groups II through V (cheese), documentary evidence that such person has made at least two commercial entries of cheese or cheese products together totaling at least 10,000 pounds, as owner of the product and importer of record, or is listed in the most current issue of "Dairy Plants Surveyed and Approved for USDA Grading Service" and has manufactured in his or her own plant 100,000 pounds or more of cheese or cheese product within the United States, during the 12-month period ending August 1 of the year preceding that for which application for license is being made, including, when required, proof of payment in said person's own name for the said entered cheese or cheese products and corresponding duties.

(3) In determining whether persons or legal entities having no direct relation are, for purposes of this regulation, affiliated, the following rules of attribution apply:

(i) Members of a family. Unless established otherwise to the satisfaction of the Licensing Authority, an individual shall be considered as owning the stock or other ownership interest owned, directly or indirectly, by or for (A) a spouse (other than a spouse legally separated from the individual under a decree of divorce or separate maintenance), and (B) children, grandchildren, parents, brothers and sisters.

(ii) Attribution from partnerships and estates. Stock or other ownership interest owned, directly or indirectly, by or for a partnership or estate shall be con

sidered as owned proportionately by its partners of beneficiaries.

(iii) Attribution from trusts. (A) Stock or other ownership interest owned, directly or indirectly, by or for a trust (other than an employees' trust) shall be considered as owned by its beneficiaries in such trust. (B) Stock or other ownership interest owned, directly or indirectly, by or for any portion of a trust of which a person is considered the owner under subpart E of part I of subchapter J of the Internal Revenue Code (relating to grantors and others treated as substantial owners) shall be considered as being owned by such person.

(iv) Attribution from corporations. If five percent or more in value of the stock or other ownership interest in a corporation is owned, directly or indirectly, by or for any person, such person shall be considered as owning the stock or other interest owned, directly or indirectly, by or for such person.

(v) Attribution to partnerships and estates. Stock or other ownership interest owned, directly or indirectly, by or for a beneficiary of a trust (other than an employees' trust) shall be considered as owned by the trust, unless such beneficiary's interest in the trust is a remote contingent interest. For purposes of this clause, a contingent interest of a beneficiary in a trust shall be considered remote if, under the maximum exercise of discretion by the trustee in favor of such beneficiary, the value of such interest, computed actuarially, is five percent or less of the value of the trust property. Stock or other ownership interest owned, directly or indirectly, by or for a person who is considered the owner of any portion of a trust under subpart E of part I of subchapter J of the Internal Revenue Code (relating to grantors and others treated as substantial owners) shall be considered as owned by a trust.

(vi) Attribution to corporations. If five percent or more in value of the stock or other ownership interest of a corporation is owned, directly or indirectly, by or for any person, such corporation shall be considered as owning the stock or other ownership interest owned, directly or indirectly, by or for such person.

(vii) Options. If any person has an option to acquire stock or other ownership interest, such stock or other ownership shall be considered as owned by such person. For purposes of this paragraph, an option to acquire such an option, and each one of a series of such options, shall be considered as an option to acquire such stock or ownership interest.

(viii) Operating rules. (A) In general. Except as provided in paragraph (b)(3)(viii)(B) and (C) of this section, stock or other ownership interest constructively owned by a person by reason of the application of paragraph (b)(3)(i), (v), (vi), or (vii), shall for purposes of applying paragraph (b)(3)(i), (v), (vi), and (vii) be considered as actually owned by such person.

Stock or construc

(B) Members of a family. other ownership interest tively owned by an individual by reason of the application of paragraph (b)(3)(i) of this section shall not be considered as owned by him or her for purposes of again applying paragraph (b)(3)(i) of this section in order to make another the constructive owner of such stock or ownership interest.

(C) Partnerships, estates, trusts, and corporations. Stock or ownership interest constructively owned by a partnership, estate, trust or corporation by reason of the application of paragraph (b)(3)(v) and (vi) of this section shall not be considered as owned by it for purposes of again applying paragraph (b)(3)(ii), (iii) and (iv) of this section in order to make another the constructive owner of such stock or ownership of interest.

(D) Option rule in lieu of family rule. For purposes of this paragraph, if stock or other ownership interest may be considered as held by an individual under paragraph (b)(3)(i) or (vii) of this section, it shall be considered as held by him under paragraph (b)(3)(viii) of this section.

(4) An application will not be approved if the submission of the evidence and certifications required to establish nonhistorical eligibility is postmarked before October 1 or later than November 1 of the year preceding the quota year for which the license is requested. If October 1 falls on a Saturday, Sunday, Federal holiday or day

which is not a full workday for the United States Postal Service, applications postmarked on October 1 or any subsequent day(s) up to and including the next full workday for the United States Postal Service will be treated the same in determining priority in the issuance of licenses, in the issuance of the import licenses.

(c)(1) Supplementary license eligibility for specific articles of cheese listed in appendix 2 and appendix 3 of this subpart will be established:

(i) By submission of documentary evidence acceptable to the Licensing Authority as required under paragraphs (b)(2) and (4) of this section; or

(ii) By application by a person having historical eligibility for a particular article shown in appendix 2 of this subpart from the country of origin for which such person is seeking supplementary license; or

(iii) By being endorsed in writing by the government of the supplying country as a preferred importer, with such endorsement being sent directly from the government of the supplying country through appropriate channels to the Licensing Authority, and for articles in Appendix 2 of this subpart by meeting one or both of qualifications in paragraphs (c)(1)(i) and (ii) of this section. For articles in Appendix 3 of this subpart such qualifications must be met beginning with the 1996 quota year. Endorsement by the government of a supplying country of a person who is known to the Licensing Authority to have at any time violated any provision of this or any other regulation or law of the United States applicable to international commerce will not be recognized by the Licensing Authority.

(2) Supplementary eligibility for specific non-cheese articles listed in Appendix 3 of this subpart will be established by:

(i) Submission of documentary evidence acceptable to the Licensing Authority as required under paragraphs (b)(2)(i) and (ii) of this section, and

(ii) Providing documentary evidence that the applicant has made at least two separate commercial entries or exports of any dairy product totaling not less than 38,000 kilograms during the 12 month period ending August 1, 1995; or at least eight separate commercial en

(d) Continuation of eligibility. (1) The historical eligibility of a person to receive a license for a quota share established under paragraph (a) of this section will be continued for subsequent quota years unless surrendered in accordance with paragraph (d)(4) of this section or suspended or revoked pursuant to §6.29: Provided, That, no such licenses shall be issued to any licensee unless such licensee, no later than 60 days prior to the beginning of each subsequent quota year submits to the Licensing Authority a notarized certification sworn to by the licensee under the penalty of perjury stating that such licensee maintains a bonafide business office within the United States and has a person, principal or resident agent upon whom service of judicial process may be made; that such licensee has been the sole user of his or her license(s); that such licensee has not permitted his or her license(s) to be used by or for any other person; that such licensee has not entered any article(s) under license(s) issued to any other person(s); and, that such licensee will enter only for his or her own entrepreneurial use the articles for which he or she will be issued license(s) during the next quota year.

(2) The nonhistorical or supplementary eligibility of a person established under paragraph (b) or (c) of this section to enter a quota share of an article for a particular quota year will expire at the end of such quota year. Eligibility for each ensuing year, if desired, must be established by following the procedures set forth in paragraph (b) or (c) of this section.

(3) Any licensee who fails to enter at least 85 percent of а particular nonhistorical or supplementary quota

share for any article for a given year will be ineligible to have such nonhistorical or supplementary quota share renewed for the next quota year, unless such licensee notifies the Licensing Authority in a letter postmarked no later than October 1 of the quota year for which his license is valid, of his intentions to enter less than 85 percent of his quota share and surrenders to the Licensing Authority that portion of the quota share which he or she does not intend to use. If, after surrendering a portion of a nonhistorical or supplementary quota share of an article, a licensee fails to import 85 percent or more of the unsurrendered portion of the quota share, such licensee will be ineligible to receive a license to import a quota share of such article in the next quota year, unless the licensee establishes that he or she was unable to enter such article due to reasons acceptable to the Licensing Authority. Furthermore,

failure to enter more than 85 percent of the total of a particular nonhistorical or supplementary quota share combined with any reallocated portions added to such original share (despite more than 85 percent utilization of the original share) will result in the licensee being ineligible for a reallocated portion for that item in the following year.

(4) A historical licensee may elect to permanently surrender his or her historical eligiblity for an ariticle in appendix 1 and receive a nonhistorical quota share for the same article from the same country of origin in the next quota year. If done, said licensee's nonhistorical eligibility will be deemed to have been in effect in the year preceding the year for which nonhistorical application is made giving said licensee the priority accorded §6.26(b)(3)(i) of this part

under

(e) Transfer of eligibility. (1) Upon receipt of documentary evidence acceptable to the Licensing Authority that the entire dairy products business covered by this regulation of a person who has established historical eligibility for a quota share has been sold or otherwise transferred (a complete transfer of total assets, binding on all partiesin-interest) to a person who is assuming the operation of the entire business

involving dairy products covered by this regulation, the Licensing Authority will recognize the successor-in-interest as having eligibility for such quota share: Provided, That, in the event of the merger of the businesses of two or more persons, the successor-ininterest, with the persons or firms for which said person is successor-in-interest and said person's affiliates and associates, will be considered only as one person for the purpose of determining nonhistorical or supplementary license eligibility for quota, shares. Eligibility for nonhistorical or supplementary quota shares may not be transferred.

(f) The Licensing Authority may, on an annual basis, require submission of signatures of the person(s) authorized to sign for a licensee.

[44 FR 75596, Dec. 20, 1979, as amended at 45 FR 33589, May 20, 1980; 45 FR 58333, Sept. 3, 1980; 46 FR 1660, Jan. 7, 1981; 60 FR 1991, Jan. 6, 1995; 60 FR 47455, Sept. 13, 1995]

§6.26 Allocation of annual quota and issuance of licenses.

(a) Historical licenses. (1) Subject to paragraph (d) of this section (concerning temporary reduction of historical quota share), and paragraph (d)(1) of §6.25 (concerning continuation of eligibility), a person, or his or her successor-in-interest, eligible to receive a historical quota share for an article in appendix 1 will receive his or her basic annual allocation plus a prorated share of the portion derived from temporary reductions of historical quota shares (done under paragraph (d) of this section) of other historical licensees for the same article in appendix 1.

(2) Subject to paragraph (d) of this section and paragraph (d)(1) of §6.25, a person, or his or her successor-in-interest, eligible to receive a historical quota share for an article in appendix 2 will receive his or her basic annual allocation, but portions of quota shares of articles in appendix 2 derived from temporary reductions of historical quota shares (done under paragraph (d) of this section) will, to the extent practicable, be allocated as supplementary quota shares in accordance with the provisions of paragraph (c) of this section.

(b) Nonhistorical licenses (pertaining only to articles in appendix 1). (1) The