Proposed Action in Section 301 Investigation of Italy's Digital Services Tax, 16819-16822 [2021-06615]

Agencies

• Office of the United States Trade Representative

[Federal Register Volume 86, Number 60 (Wednesday, March 31, 2021)]
[Notices]
[Pages 16819-16822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06615]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket Number USTR-2021-0004]


Proposed Action in Section 301 Investigation of Italy's Digital 
Services Tax

AGENCY: Office of the United States Trade Representative.

ACTION: Request for comments and notice of public hearing.

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SUMMARY: The Office of the United States Trade Representative (USTR) 
requests written comments regarding a potential trade action in 
connection with the Section 301 investigation of Italy's Digital 
Services Tax (DST). USTR also will convene virtual public hearings and 
accept rebuttal comments in relation to the potential action.

DATES: 
    April 21, 2021: To be assured of consideration, submit requests to 
appear at a hearing, along with a summary of the testimony, by this 
date.
    April 30, 2021: To be assured of consideration, submit written 
comments by this date.
    May 3, 2021: Multi-jurisdictional virtual hearing on proposed 
actions.
    May 5, 2021 at 9:30 a.m.: Virtual hearing on Italy DST proposed 
action.
    May 10, 2021: To be assured of consideration, submit multi-
jurisdictional hearing rebuttal comments by this date.
    May 12, 2021: To be assured of consideration, submit Italy DST 
hearing rebuttal comments by this date.

ADDRESSES: Submit documents in response to this notice, including 
written comments and hearing appearance requests, through the online 
USTR portal: https://comments.ustr.gov/s/.

FOR FURTHER INFORMATION CONTACT: For questions concerning the 
investigation, please contact Ben Allen or Patrick Childress, Assistant 
General Counsels at (202) 395-9439 and (202) 395-9531, respectively; 
Robert Tanner, Director, Services and Investment at (202) 395-6125; or 
Michael Rogers, Director, Europe and the Middle East at (202) 395-2684. 
For issues with on-line submissions, please contact the USTR Section 
301 line at (202) 395-5725.

SUPPLEMENTARY INFORMATION:

I. Proceedings in the Investigation

    Italy has adopted a DST that applies to companies that during the 
previous calendar year, generated [euro]750 million or more in 
worldwide revenues and [euro]5.5 million or more in revenues deriving 
from the provision of digital services in Italy.
    On June 2, 2020, the U.S. Trade Representative initiated an 
investigation of Italy's DST pursuant to section 302(b)(1)(A) of the 
Trade Act of 1974, as amended (Trade Act). See 85 FR 34709 (June 5, 
2020) (notice of initiation). The notice of initiation solicited 
written comments on, inter alia, the following aspects of Italy's DST: 
Discrimination against U.S. companies; retroactivity; and possibly 
unreasonable tax policy. With respect to tax policy, USTR solicited 
comments on, inter alia, whether the DST diverged from principles 
reflected in the U.S. and international tax systems including 
extraterritoriality; taxing revenue not income; and a purpose of 
penalizing particular technology companies for their commercial 
success. Interested persons filed over 380 written submissions in 
response. The public submissions are available on www.regulations.gov 
in docket number USTR-2020-0022.
    Under section 303 of the Trade Act, the U.S. Trade Representative 
requested consultations with the government of Italy regarding the 
issues involved in the investigation. Consultations were held on 
November 10, 2020.
    Based on information obtained during the investigation, USTR 
prepared a comprehensive report on Italy's DST (Italy DST Report). The 
Italy DST Report is posted on the USTR website at https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-digital-services-taxes. The report includes a full description of Italy's DST, 
and supports findings that Italy's DST is unreasonable and 
discriminatory and burdens or restricts U.S commerce.
    On January 6, 2021, based on the information obtained during the 
investigation and the advice of the Section 301 Committee, the U.S. 
Trade Representative determined that Italy's DST is unreasonable or 
discriminatory and burdens or restricts U.S. commerce, and therefore is 
actionable under sections 301(b) and 304(a) of the Trade Act (19 U.S.C. 
2411(b) and 2414(a)). See 86 FR 2477 (January 12, 2021).

II. Proposed Action

    Section 301(b) provides that upon determining that the acts, 
policies, and practices under investigation are actionable and that 
action is appropriate, the U.S. Trade Representative shall take all 
appropriate and feasible action authorized under section 301(c), 
subject to the specific direction, if any, of the President regarding 
such action, and all other appropriate and feasible action within the 
power of the President that the President may direct the U.S. Trade 
Representative to take under section 301(b), to obtain the elimination 
of that act, policy, or practice.
    Section 301(c)(1)(B) of the Trade Act authorizes the U.S. Trade 
Representative to impose duties on the goods of the foreign country 
subject to the investigation. Pursuant to sections 301(b) and (c), USTR 
proposes that the U.S. Trade Representative should determine that 
action is appropriate and that appropriate action would include the 
imposition of additional ad valorem tariffs on certain products of 
Italy.
    In particular, USTR proposes to impose additional tariffs of up to 
25 percent ad valorem on an aggregate level of trade that would collect 
duties on goods of Italy in the range of the amount of DST that Italy 
is expected to collect from U.S. companies. Initial estimates indicate 
that the value of the DST payable by U.S.-based company groups to Italy 
will be up to approximately $140 million per year.
    USTR further proposes that the goods of Italy subject to additional 
tariffs would be drawn from the preliminary list of products in the 
Annex to this notice, as specified by the listed eight-digit tariff 
subheadings.

III. Request for Public Comments

    In accordance with section 304(b) of the Trade Act (19 U.S.C. 
2414(b)), USTR invites comments from interested persons with respect to 
whether action is appropriate, and if so, the appropriate action to be 
taken.
    USTR requests comments with respect to any issue related to the 
action to be taken in this investigation. With respect to the proposed 
tariff action outline above, USTR specifically invites comments 
regarding:
     The level of the burden or restriction on U.S. commerce 
resulting from Italy's DST, including the amount of DST payments owed 
by U.S. companies, the annual growth rate of such payments, and other 
effects, such as compliance costs.
     The appropriate aggregate level of trade to be covered by 
additional duties.
     The level of the increase, if any, in the rate of duty.
     The specific products to be subject to increased duties, 
including whether the tariff subheadings listed in the Annex should be 
retained or removed, or whether tariff subheadings not currently on the 
list should be added.

[[Page 16820]]

    In commenting on the inclusion or removal of particular products on 
the preliminary list of products subject to the proposed additional 
duties, USTR requests that commenters specifically address whether 
imposing increased duties on a particular product would be practicable 
or effective to obtain the elimination of Italy's acts, policies, and 
practices, and whether imposing additional duties on a particular 
product would cause disproportionate economic harm to U.S. interests, 
including small- or medium-size businesses and consumers.
    Simultaneously with this notice, USTR also is requesting public 
comments on proposed trade actions in five other DST investigations 
initiated at the same time as the Italy DST investigation. Certain 
interested persons may wish to provide written comments or oral 
testimony on multi-jurisdictional issues common to two or more 
investigations. To avoid duplication, the USTR portal will have a 
separate docket for multi-jurisdictional submissions, and USTR will 
hold a separate multi-jurisdictional hearing.
    To be assured of consideration, you must submit written comments on 
the proposed action by April 30, 2021, and post-hearing rebuttal 
comments by May 10, 2021 for the multi-jurisdictional hearing, and by 
May 12, 2021 for the Italy DST hearing.

IV. Hearing Participation

    The Section 301 Committee will convene a virtual public hearing for 
comments pertaining to the Italy DST proposed action on May 5, 2021, 
beginning at 9:30 a.m. Those requesting to appear at this hearing 
should have comments applicable only to the Italy DST proposed action.
    The Section 301 Committee will convene a virtual public hearing for 
comments pertaining to multiple jurisdictions on May 3, 2021, beginning 
at 9:30 a.m. Those requesting to appear at the multi-jurisdictional 
hearing should have comments that are applicable to two or more DST 
investigations.
    For either hearing, you must submit a request to appear at the 
specific hearing using the electronic portal at https://comments.ustr.gov/s/. You will be able to view a docket entitled 
`Request to Appear at Hearing on Proposed Action in Section 301 
Investigation of Italy's Digital Services Tax.' Requests to appear must 
include a summary of testimony, and may be accompanied by a pre-hearing 
submission. Remarks at the hearing are limited to five minutes to allow 
for possible questions from the Section 301 Committee. All submissions 
must be in English. To be assured of consideration, USTR must receive 
your request to appear by April 21, 2021.

V. Procedures for Written Submissions

    You must submit written comments, rebuttal comments, and requests 
to appear at the hearing using the electronic portal at https://comments.ustr.gov/s. You will be able to view a docket entitled 
`Comments Concerning Proposed Action in Section 301 Investigation of 
Italy's Digital Services Tax' on the portal, docket number USTR-2021-
0004.
    You do not need to establish an account to submit comments. Fields 
with a gray (BCI) notation are for Business Confidential Information 
and the information entered will not be publicly available. Required 
fields are marked `Required' and will have a red asterisk (*). Fields 
with a green (Public) notation will be viewable by the public.
    The first screen of the portal requires you to enter identification 
and contact information. Third party organizations such as law firms, 
trade associations, or customs brokers should identify the full legal 
name of the organization they represent, and identify the primary point 
of contact for the submission. The remaining fields of the form are 
optional.
    After entering the identification and contact information, you can 
complete the remainder of the questionnaire, or any portion of it by 
clicking `Next.' You can comment on multiple products in a single 
entry, or submit multiple comments. You will be able to navigate 
through each screen of the form by clicking `Next,' with or without 
entering a response to each field on an individual screen or page. 
Additionally, you will be able to upload documents at the end of the 
form and designate whether USTR should treat the documents as business 
confidential or public information.
    For uploads containing BCI, the file name of the business 
confidential version should begin with the characters `BCI'. Any page 
containing BCI must be clearly marked `BUSINESS CONFIDENTIAL' on the 
top of that page and the submission should clearly indicate, via 
brackets, highlighting, or other means, the specific information that 
is BCI. If you request business confidential treatment, you must 
certify in writing that disclosure of the information would endanger 
trade secrets or profitability, and that the information would not 
customarily be released to the public. Parties uploading attachments 
containing BCI also must submit a public version of their comments. The 
file name of the public version--which must be uploaded on https://comments.ustr.gov/s/, should begin with the character `P'. The `BCI' 
and `P' should be followed by the name of the person or entity 
submitting the comments or rebuttal comments. If these procedures are 
not sufficient to protect BCI or otherwise protect business interests, 
please contact the USTR Section Hotline 301 line at (202) 395-5725 to 
discuss whether alternative arrangements are possible. USTR will post 
attachments uploaded to the docket for public inspection, except for 
attachments marked as business confidential.
    You can view all public submissions on the USTR portal at https://comments.ustr.gov/s.

Greta Peisch,
General Counsel, Office of the United States Trade Representative.

Annex

    Note: All products that are classified in the eight-digit 
subheadings of the Harmonized Tariff Schedule of the United States 
(HTSUS) that are listed in this Annex are covered by the proposed 
action. The product descriptions that are contained in this Annex 
are provided for informational purposes only, and are not intended 
to delimit in any way the scope of the proposed action. Any 
questions regarding the scope of a particular HTSUS subheading 
should be referred to U.S. Customs and Border Protection. In the 
product descriptions, the abbreviation ``nesoi'' means ``not 
elsewhere specified or included''.


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      HTSUS subheading                   Product description
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0305.63.60.................  Anchovies, in brine or salted but not dried
                              or smoked, other than in immediate
                              containers weighing with their contents
                              6.8 kg or less each.
1604.16.20.................  Anchovies, whole or in pieces but not
                              minced, in oil, in airtight containers.
1604.16.40.................  Prepared or preserved anchovies, whole or
                              in pieces, not minced, not in oil, in
                              immediate containers with their contents
                              6.8 kg or less ea.
1604.31.00.................  Caviar.
1604.32.40.................  Caviar substitutes prepared from fish eggs,
                              nesoi.

[[Page 16821]]

 
3303.00.20.................  Perfumes and toilet waters, other than
                              floral or flower waters, not containing
                              alcohol.
3307.90.00.................  Depilatories and other perfumery, cosmetic
                              or toilet preparations. nesoi.
4202.29.10.................  Handbags w. or w/o shld. strap or w/o
                              handle of mat. (o/t leather, shtng. of
                              plas., tex. mat., vul. fib. or paperbd.),
                              paper cov., of plas.
4202.29.50.................  Handbags w. or w/o shld. strap or w/o
                              handle of mat. (o/t leather, shtng. of
                              plas., tex. mat., vul. fib. or paperbd.),
                              pap.cov.,of mat. nesoi.
4202.29.90.................  Handbags with or without shoulder straps or
                              without handle, with outer surface of
                              vulcanized fiber or of paperboard, not
                              covered with paper.
4202.31.30.................  Articles of a kind normally carried in the
                              pocket or handbag, with outer surface of
                              reptile leather.
4203.29.30.................  Men's gloves, mittens and mitts of leather
                              or composition leather, nesoi, seamed.
4203.29.40.................  Gloves, mittens and mitts of leather or
                              composition leather, nesoi, not lined, for
                              persons other than men.
4203.29.50.................  Gloves, mittens and mitts of leather or
                              composition leather, nesoi, lined, for
                              persons other than men.
6103.10.10.................  Men's or boys' suits, knitted or crocheted,
                              of wool or fine animal hair.
6103.31.00.................  Men's or boys' suit-type jackets and
                              blazers, knitted or crocheted, of wool or
                              fine animal hair.
6103.32.00.................  Men's or boys' suit-type jackets and
                              blazers, knitted or crocheted, of cotton.
6103.33.20.................  Men's or boys' suit-type jackets and
                              blazers, knitted or crocheted, of
                              synthetic fibers, nesoi.
6103.39.80.................  Men's or boys' suit-type jackets and
                              blazers, of textile mats, (except wool,
                              cotton, or mmf), cont less than 70% by wt
                              of silk, knitted/croc.
6104.31.00.................  Women's or girls' suit-type jackets and
                              blazers, knitted or crocheted, of wool or
                              fine animal hair.
6104.32.00.................  Women's or girls' suit-type jackets and
                              blazers, knitted or crocheted, of cotton.
6104.33.20.................  Women's or girls' suit-type jackets and
                              blazers, knitted or crocheted, of
                              synthetic fibers, nesoi.
6110.30.10.................  Sweaters, pullovers, sweatshirts and
                              similar articles, knitted or crocheted, of
                              man-made fibers, cont. 25% or more by
                              weight of leather.
6117.80.20.................  Ties, bow ties and cravats, containing 70%
                              or more by weight of silk or silk waste,
                              knitted or crocheted.
6117.80.87.................  Ties, bow ties and cravats, containing
                              under 70% by weight of silk or silk waste,
                              knitted or crocheted.
6117.80.95.................  Made up clothing accessories (excl shawl,
                              scarve, and like, tie, cravat, headband,
                              ponytail holder and like), cont < 70% wt
                              of silk, k/c.
6203.19.10.................  Men's or boys' suits, not knitted or
                              crocheted, of cotton.
6203.31.90.................  Men's or boys' suit-type jackets and
                              blazers, of wool or fine animal hair, not
                              knitted or crocheted.
6203.32.10.................  Men's or boys' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              cotton, containing 36 percent or more of
                              flax fibers.
6203.32.20.................  Men's or boys' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              cotton, under 36% by weight of flax.
6203.33.10.................  Men's or boys' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              synthetic fibers, cont. 36% or more of
                              wool or fine animal hair.
6203.33.20.................  Men's or boys' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              synthetic fibers, under 36% by weight of
                              wool.
6203.39.10.................  Men's or boys' suit-type jackets and
                              blazers, of artificial fibers, containing
                              36% or more by weight of wool or fine
                              animal hair, not k/c.
6203.39.20.................  Men's or boys' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              artificial fibers, under 36% by weight of
                              wool.
6203.39.50.................  Men's or boys' suit-type jackets and
                              blazers, of textile materials (except
                              wool, cotton or mmf), cont 70% or more by
                              weight of silk, not k/c.
6203.39.90.................  Men's or boys' suit-type jackets and
                              blazers, of text materials (except wool,
                              cotton or mmf), containing under 70% by
                              weight of silk, not k/c.
6204.31.10.................  Women's or girls' suit-type jackets &
                              blazers, of wool or fine animal hair, not
                              knitted or crocheted, cont. 30% or more of
                              silk/silk waste.
6204.31.20.................  Women's or girls' suit-type jackets and
                              blazers, of wool or fine animal hair, not
                              knitted or crocheted, under 30% by weight
                              of silk.
6204.32.20.................  Women's or girls' suit-type jackets and
                              blazers, of cotton, not knitted or
                              crocheted, under 36% flax.
6204.33.10.................  Women's or girls' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              synthetic fibers, cont. 30% or more of
                              silk/silk waste.
6204.33.40.................  Women's or girls' suit-type jackets &
                              blazers, not knitted or crocheted, of
                              synthetic fibers, cont. 36% or more of
                              wool or fine animal hair.
6204.33.50.................  Women's or girls' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              synthetic fibers, nesoi.
6204.39.20.................  Women's or girls' suit-type jackets &
                              blazers, not knitted or crocheted, of
                              artificial fibers, cont. 36% or more of
                              wool or fine animal hair.
6204.39.30.................  Women's or girls' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              artificial fibers, under 36% by weight of
                              wool.
6204.39.60.................  Women's or girls' suit-type jackets and
                              blazers, not knitted/crocheted, of textile
                              materials nesoi, cont. 70% + of silk or
                              silk waste.
6204.39.80.................  Women's or girls' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              textile materials nesoi.
6211.39.03.................  Rec perf outwear, men's or boys' track
                              suits or other garments nesoi, not knitted
                              or crocheted, of wool or fine animal hair.
6211.39.30.................  Men's or boys' track suits or other
                              garments nesoi, not knitted or crocheted,
                              of wool or fine animal hair, o/than rec
                              perf outwear.
6215.10.00.................  Ties, bow ties and cravats, not knitted or
                              crocheted, of silk or silk waste.
6215.20.00.................  Ties, bow ties and cravats, not knitted or
                              crocheted, of man-made fibers.
6215.90.00.................  Ties, bow ties and cravats, not knitted or
                              crocheted, of textile materials nesoi.
6403.59.60.................  Footwear w/outer soles and uppers of
                              leather, not cov. ankle, n/welt, for men,
                              youths and boys.
6403.91.60.................  Footwear w/outer soles of rubber/plastics/
                              composition leather & uppers of leather,
                              covering the ankle, n/welt, for men,
                              youths and boys.
6403.91.90.................  Footwear w/outer soles of rubber/plastics/
                              comp. leather & uppers of leather, cov.
                              ankle, n/welt, for persons other than men/
                              youths/boys.
6404.20.40.................  Footwear w/outer soles of leather/comp.
                              leath., n/o 50% by wt. rub./plast. or rub./
                              plast./text. & 10%+ by wt. rub./plast.,
                              val. o/$2.50/pr.
9001.40.00.................  Spectacle lenses of glass, unmounted.
9001.50.00.................  Spectacle lenses of materials other than
                              glass, unmounted.
9001.90.40.................  Lenses nesoi, unmounted.

[[Page 16822]]

 
9001.90.90.................  Optical elements nesoi, unmounted.
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[FR Doc. 2021-06615 Filed 3-30-21; 8:45 am]
BILLING CODE 3290-F1-P