Federal Register
•
•
Trade Activity
Calendar
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Congressional
Activities
•
•
|
Volume 16, Issue 56
|
Thursday, March 19, 2009
|
Multinational Companies Brace for Crackdown on International Tax Issues
Two business associations released recently a report defending the global activities of multinational corporations. The report comes as Congress and the Obama administration are preparing to crack down on what they see as some MNCs’ evasion of U.S. taxes on income they earn abroad.
The study was commissioned by Business Roundtable and the United States Council for International Business. A press release from the two groups cites Matthew Slaughter, a professor of international economics at Dartmouth’s Tuck School of Business and the author of the study, as saying it shows that “the notion that U.S. multinationals have ‘abandoned’ our country by shipping the majority of their operations overseas is not supported by the facts.” In fact, the press release states, the worldwide operations of U.S. MNCs are highly concentrated in the U.S., with nearly 2.3 domestic employees for every one foreign affiliate employee, thus refuting the idea that international expansion tends to “hollow out” domestic operations. In addition, the foreign affiliates of MNCs are located primarily in high-income countries, not low-income countries.
According to Slaughter, the study also found that MNCs make a substantial contribution to the domestic economy and that the specific way they do this will be key in helping the U.S. recover from the current economic downturn. MNCs “strengthen the American economy through a combination of their domestic activity and their international engagement, which together stimulate capital investment, research and development, and trade,” Slaughter said. “These productivity-enhancing activities, in turn, lead to more job opportunities and to larger average paychecks for millions of American workers.” In addition, MNCs “that are able to compete effectively in foreign markets will be better positioned to help lead America out of recession. By preserving and enhancing the health, vitality and competitiveness of their worldwide operations, U.S. multinational companies can help stem job losses in the United States and, eventually, hire more American workers.”
The study was released just as government officials and lawmakers seeking ways to generate additional revenue for economic stimulus efforts are turning their attention to stronger enforcement of rules on income MNCs earn overseas. “Each year, the United States loses an estimated $100 billion from U.S. taxpayers using offshore tax schemes to dodge their U.S. tax obligations,” Sen. Carl Levin, D-Mich., told the Senate Finance Committee March 17. These schemes include “networks of offshore trusts and corporations with hidden assets” and “deceptive offshore transactions used to recast taxable income as allegedly tax free payments,” Levin said. The money lost from these activities is money that cannot be used to “maintain our highways, protect our borders, advance medical research, and inspect our food,” Levin said.
In response, Levin and others introduced earlier this month S. 506, the Stop Tax Haven Abuse Act. This bill includes provisions that would treat certain foreign corporations managed primarily from the U.S. as U.S. domestic corporations for income tax purposes, authorize special measures against foreign jurisdictions and financial institutions that impede U.S. tax enforcement, and strengthen penalties on those who aid or abet tax evasion. Companion legislation (H.R. 1265) has been introduced in the House, and Treasury Secretary Timothy Geithner has reportedly expressed support for these measures.
The Obama administration is ramping up its efforts to combat tax evasion as well. According to CQ Today, Internal Revenue Service Commissioner Doug Shulman told the Finance Committee that the IRS is “hiring more international investigators and increasing the frequency of audits” and that an expanded plan for legislative and enforcement strategies will be rolled out in the near future.
Source Document 1...
|
House, Senate Launch Efforts to Change Cuba Trade Policy
Efforts to ease trade with Cuba are beginning to move forward in Congress. Both the House and Senate took steps this week to expand bilateral commerce with the island nation, which has been under a U.S. embargo for over 40 years. Supporters say opening the Cuban market could provide a significant boost to the struggling U.S. economy.
In the Senate, a bipartisan group of 15 senators wrote to Treasury Secretary Timothy Geithner this week to oppose the continuation of a policy that has curtailed exports of agricultural and medical products to Cuba. The letter called on Geithner to reverse the recent action by Treasury’s Office of Foreign Assets Control, which they said runs contrary to the intent of Congress, as expressed in the fiscal year 2009 omnibus appropriations bill, to facilitate agricultural trade with Cuba.
In a March 11 notice, OFAC stated that the Cuba trade provisions in the omnibus bill “directed that none of the funds made available in [that bill] may be used to administer, implement, or enforce” a February 2005 regulatory amendment concerning the definition of “cash in advance,” one of the methods of payment for agricultural exports to Cuba allowed by the Trade Sanctions Reform and Export Enhancement Act of 2000. This amendment stated that “cash in advance” should be given its ordinary commercial meaning, which requires payment to be received by the seller or the seller’s agent prior to the shipment of goods from the port at which they are loaded. OFAC stated last week that because the omnibus bill does not amend the TSRA language, those statutory provisions remain in place, implying that OFAC’s position will not change either.
However, the senators charged that the agency’s interpretation of the term “cash in advance” as requiring payment prior to the shipment of goods is legally inaccurate. The letter cited the American Law Division of the Congressional Research Service as saying that “it appears customary within the international trade and finance community to place the emphasis on the legal transfer of control, rather than on the date of shipment” and that “OFAC’s interpretation appears to limit the available payment options to those that are considered risky, undesirable, and underutilized.” The letter added that prior to OFAC’s regulatory change cash-based sales of agricultural products to Cuba “were taking place and working well,” with no reported instances of a Cuban buyer taking possession of U.S. goods prior to completing payment to the seller.
The letter called on Geithner to stand by a pledge he made during Senate consideration of his nomination earlier this year to take “great care to follow congressional intent … [and] to ensure that OFAC’s activities with regard to Cuba are achieving its important objectives without unnecessary hurdles or unreasonable administrative delays.” Sen. Max Baucus, D-Mont., added that he fully expects Geithner to “revisit this issue to get U.S.-Cuba relations back on track and get our Cuba policy right.”
Baucus said he plans to soon introduce legislation that would ease restrictions on travel to and payment from Cuba, but House Ways and Means Committee Chairman Charles Rangel, D-N.Y., beat him to the punch. On March 16 Rangel introduced three bills to increase economic engagement with Cuba, including one that would overturn OFAC’s interpretation of “payment of cash in advance.” That bill would also establish a government program to promote agricultural exports to Cuba and ease various requirements associated with travel to and doing business with Cuba.
Rangel also introduced a bill (H.R. 1530) that would eliminate the U.S. trade embargo completely within 60 days of its enactment. This bill asserts that the embargo is counterproductive because it adds “to the hardships of the Cuban people while making the United States the scapegoat for the failures of the communist system.” It also states that the best way to support democratic change in Cuba is by promoting trade and commerce, travel, communications and person-to-person exchanges, an approach the U.S is already using in other countries with similar governments.
Source Document 1...
Source Document 2...
Source Document 3...
Source Document 4...
|
House Trade Subcommittee to Consider Trade Aspects of Climate Change Legislation
The House Ways and Means Trade Subcommittee will hold a hearing March 24 on the trade aspects of climate change legislation, including how to minimize carbon leakage and maintain U.S. competitiveness. While oral testimony at this hearing will be from invited witnesses only (who have yet to be named), any individual or organization may submit by April 7 a written statement for inclusion in the printed record of the hearing.
A Trade Subcommittee press release notes that in a previous hearing on climate change the Ways and Means Committee heard testimony from numerous witnesses recommending that Congress implement revenue measures (e.g., auction-based cap-and-trade proposals or carbon taxes) that would reduce human greenhouse gas emissions. In connection with the development of these measures witnesses also encouraged the committee to (1) promote a comprehensive global effort to address climate change and ensure a level regulatory playing field for U.S. manufacturers, (2) mitigate higher energy costs borne by consumers, (3) maximize the impact that climate change legislation will have on growing the U.S. economy, and (4) maintain the competitiveness of U.S. businesses, farmers and workers.
|
ITC Narrows GSP Review of Possible Competitive Need Limit Waivers
At the direction of the Office of the U.S. Trade Representative, the International Trade Commission has narrowed its investigation of possible waivers of the Generalized System of Preferences’ competitive need limits. Specifically, the ITC has terminated this investigation with respect to the following articles because the petitions requesting CNL waivers for them have been withdrawn.
• calcium silicon ferroalloys (HTSUS 7202.99.20) from Argentina
• amino-naphthols and amino-phenol, their ethers, esters, except those with more than one kind of oxygen function; and salts thereof, not elsewhere specified or included (HTSUS 2922.41.00) from Brazil
• ferrochromium containing by weight more than 4 percent of carbon (HTSUS 7202.41.00) from India
The ITC states that all other information and due dates relating to this investigation remain unchanged and that it expects to transmit its report to the USTR by April 13.
Source Document 1...
|
CBP Proposes to Revoke Classification Ruling on Wall Banners and Pennants
In the March 19, 2009, Customs Bulletin and Decisions, U.S. Customs and Border Protection proposed to revoke the following classification ruling. Comments are due by April 18.
Product: Wall banners and pennants composed of 70 percent wool and 30 percent acrylic.
Proposed action: Revocation of NY K86053.
Current classification: HTSUS 6307.90.85 (5.8 percent duty).
Proposed classification: HTSUS 6307.90.98 (7 percent duty).
Source Document 1...
|
AD/CV Notices: Pipe; Hangers; Pipe Fittings; Steel Rod
The ITA and ITC have recently taken AD and CV actions regarding the following products.
Pressure pipe from China
Garment hangers from China
Malleable pipe fittings from China
Steel threaded rod from China
Following are summaries of current antidumping and countervailing actions taken by the International Trade Administration or the International Trade Commission.
Agency: ITA.
Commodity: Welded austenitic stainless pressure pipe, classified under HTSUS 7306.
Country: China.
Nature of Notice: Issuance of CV duty order in investigation C-570-931, effective March 19.
Agency: ITA.
Commodity: Steel wire garment hangers, classified under HTSUS 7326.20.0020 and 7323.99.9060.
Country: China.
Nature of Notice: Initiation and preliminary results of changed circumstances review and intent to partially revoke AD duty order in investigation A-570-918, effective March 19.
Agency: ITC.
Commodity: Malleable cast iron pipe fittings.
Country: China.
Nature of Notice: March 24 open meeting for briefing and vote in sunset review of investigation 731-TA-1021.
Agency: ITC.
Commodity: Steel threaded rod.
Country: China.
Nature of Notice: March 26 open meeting for briefing and vote on final AD injury determination in investigation 731-TA-1145.
Source Document 1...
Source Document 2...
Source Document 3...
Source Document 4...
|
RECENTLY INTRODUCED LEGISLATION IN THE 111th CONGRESS:
Legislation Repository...
|
|
Bill#
Sponsor
|
Date Introduced
|
Description
|
Action
|
|
|
S. 610
Kyl
|
03/17/09
|
A bill to amend title 35, United States Code, to provide for patent reform
|
Referred to the Senate Committee on the Judiciary
|
|
|
S. 622
Feinstein
|
03/17/09
|
A bill to ensure parity between the temporary duty imposed on ethanol and tax credits provided on ethanol
|
Referred to the Senate Committee on Finance
|
|
|
H.R. 1560
Eshoo
|
03/17/09
|
A bill to make the moratorium on Internet access taxes and multiple and discriminatory taxes on electronic commerce permanent
|
Referred to the House Committee on the Judiciary
|
|
|
S. 608
Tester
|
03/17/09
|
A bill to amend the Consumer Product Safety Improvement Act of 2008 to exclude secondary sales, repair services and certain vehicles from the ban on lead in children's products
|
Referred to the Senate Committee on Commerce, Science and Transportation
|
RECENTLY ANNOUNCED CONGRESSIONAL HEARINGS:
Hearings Repository...
|
|
Date/Time
|
Committee
|
Subject
|
|
|
3/24/2009
2:00pm
|
House Ways and Means Trade Subcommittee
|
Trade aspects of climate change legislation, including how to minimize carbon leakage and maintain U.S. competitiveness
|
|
Executive Editor: Shawn McCausland
Contact:
smccausland@strtrade.com
1300 Pennsylvania Avenue, Suite 400
Washington, D.C. 20004
Tel: (202) 216-9307
Fax: (202) 842-2247
Circulation/User Registration/General Information/Advertising:
Director of Marketing
Contact:
marketing@strtrade.com
1000 Northwest 57th Court, Suite 600
Miami, Florida 33126
Tel: (800) 5-TRADE-5 or (800) 587-2335 or (305) 267-9200
Fax: (305) 261-0403
|
World Trade\INTERACTIVE™ is an online international trade information service, published electronically by
WorldTrade Interactive, Inc. It is prepared by the law firm of Sandler, Travis & Rosenberg, P.A.
The publisher has taken all reasonable steps to verify the accuracy of the content of this site.
However, WorldTrade Interactive, Inc., and Sandler, Travis & Rosenberg, P.A.,
shall not be responsible for any errors or omissions.
NOTE: Information contained herein is of necessity a summary of complicated and fact-specific issues.
It is not intended to convey legal advice, and receipt of it does not constitute or create an attorney-client relationship.
Before you act on any information provided in this document,
you should seek professional advice regarding its applicability to your specific circumstances.
Copyright © 2010 WorldTrade Interactive, Inc. - All Rights Reserved
Receipt of this free publication is allowed under the House and Senate gift rules.
See Senate Rule XXXV 1.(c)(9) and 1.(c)(19); House Rule XXV 5.(a)(3)(I) and 5(a)(3)(R)(i).
|
|
|
