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Cotton Import Fee Exemption Removed

Thursday, June 16, 2016
Sandler, Travis & Rosenberg Trade Report

The Department of Agriculture’s Agricultural Marketing Service has issued a final rule that, effective July 15, will remove the cotton import de minimis provision, which exempts importers from paying the cotton fee on cotton or cotton-containing products when the line item value is $2.00 or less. This exemption was initially established to lessen the administrative burden of collecting the cotton fee where the costs of collection would exceed the value of the assessment. However, technological advances in U.S. Customs and Border Protection’s documentation process have reduced the collection costs and CBP has stopped charging USDA for the collection of assessments on agricultural commodities.

For goods subject to the cotton fee, the total value of assessments levied on cotton imports (which is currently $0.012013 per kilogram) is the sum of two parts. The first is based on the weight of cotton imported and levied at a rate of $1 per bale (500 pounds). The second is based on the value of imported cotton lint or the cotton contained in imported cotton products and levied at a rate of five-tenths of one percent of the value of domestically produced cotton.

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