than the Government of the United States and any agency thereof).

(v) "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.

(w) "Quota share" means that part of the annual quota of an article listed in Appendix 1 or Appendix 2 for which a person is eligible.

(x) "Quota year" means the 12month period beginning on January 1 of any given year.

(y) "Regulation" means the provisions contained in the Licensing Regulation of this subpart.

(z) "United States" means the Customs Territory of the United States, which is limited to the United States, District of Columbia and Puerto Rico. [44 FR 75596, Dec. 20, 1979, as amended at 45 FR 54302, Aug. 15, 1980; 46 FR 1660, Jan. 7, 1981; 52 FR 19463, May 22, 1987]

§ 6.22 Prohibitions and restrictions on im

porters.

(a) No person may enter or cause to be entered any article listed in Appendix 1 or Appendix 2, 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.

§ 6.23 Exceptions.

Licenses are not required for the entry of:

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

(b) Articles with an aggregate value of not over $25 in any shipment, if imported as samples for taking orders, for the personal use of the importer, or for research.

(c) Articles imported for exhibition, display or sampling at a trade fair, or for research, if written approval of the Licensing Authority is obtained.

§ 6.24 Application for license.

Applications to the Licensing Authority for the issuance of licenses to

enter articles must be made in writing, addressed to the Head, Dairy and Import Group, Dairy, Livestock and Poultry Division, Foreign Agricultural Service, U.S. Department of Agriculture, Washington, D.C. 20250. Each letter of application must state the article (including the Part 3 TSUS Appendix classification number), the country of origin of the article, and, in the case of supplementary and nonhistorical licenses or licenses for portions allocated under paragraph (e) of § 6.26, the size of each quota share desired. Unpostmarked applications will not be approved by the Licensing Authority.

§ 6.25 Eligibility.

(a) Historical eligibility. (1) Historical eligibility for licenses to enter quota shares of articles subject to quotas in effect as of November 22, 1978, the adjusted quantities of which are shown in Appendix 1, has already been determined.

(2) Historical eligibility for licenses to enter quota shares of articles under Group V of Appendix 2, which prior to January 1, 1980 were not subject to quota, will be established upon submission by the importer of copies of broker's copies of official consumption entry or warehouse withdrawal for consumption records, Customs forms 7501 and 7505, showing the applicant as the importer of record or importer of account for entries made during the period July 1, 1978 through June 30, 1979 of cheese, cheese product or substitutes for cheese falling under TSUS Nos. 117.6035 (Swiss or Emmenthaler), 117.6055, 117.7550, 117.8550 (GruyereProcess), 117.7560, 117.8560 except soft-ripened cheese (Other cheese, NSPF, except soft-ripened cheese), and 117.7570 and 117.8570 (Other cheese, Lowfat). Copies of other than the broker's copy will only be accepted if it is established that, for reasons satisfactory to the Licensing Authority, the broker's copy is not available. The Licensing Authority may also require a copy of the invoice or other documentation showing that the importer was the owner of the article at the time entry was made and substantiating the type or variety of cheese

entered. Such invoices should accompany an application for Appendix 2 historical licenses for TSUS items 117.7560 and 117.8560. Further, eligibility for articles in Group V(c) from "Other Countries" in Appendix 2 may be established only by importers who hold no other historical license for any article under Appendix 1 or Appendix 2 as of January 7, 1981. Applications for historical license for TSUS Appendix Item 950.10D from "Other Countries" in Appendix 2 must be postmarked no later than February 11, 1981.

(3) Historical eligibility for license to enter a quota share of an article under Group II, III, or IV of Appendix 2 from a particular country of origin may be acquired only by persons eligible for a historical license to enter such article from such country of origin under Appendix 1.

(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 a 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 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 affil

iate 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 considered 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.

(B) Members of a family. Stock or other ownership interest constructively 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 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) Evidence and certification required to establish the nonhistorical eligibility of a person making application to receive a quota share for a given quota year shall not be approved by the Licensing Authority if postmarked before August 1 or later than November 1 of the year preceding the quota year for which the license to import is requested. Whenever August 1 falls on a Saturday, Sunday, Federal holiday, or other day which is not a normal full workday for the United

States Postal Service, applications postmarked on August 1 and any subsequent day(s), if any, through the immediately following normal full workday for the United States Postal Service will be treated the same in determining priority in the issuance of the import licenses.

(c) Supplementary licenses. (1) Supplementary license eligibility for specific articles listed in Appendix 2 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 under paragraphs (a) (2) and (3) of this section for the article 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, beginning with the 1981 quota year, by meeting one or both of qualifications (c)(1) (i) and (ii) of this section. Endorsement by the government of a supplying country of a person who is known by 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) Notwithstanding paragraph (b)(4) of this section, certification required to establish supplementary eligibility for license for TSUS Appendix item 950.10D from "Other Countries" for 1981 must be postmarked no earlier than January 22, 1981 and no later than February 11, 1981. Importers who have already submitted supplementary license certification during the application period which ended November 1, 1980, may simply request license for this article by submitting a letter without further documentation postmarked as required in this paragraph.

(3)(i) Supplementary license eligibility for the additional 392,418 pounds

of Italian-type cheese in original loaves from Uruguay made available by Presidential Proclamation No. 5908 of November 18, 1988 as amended by Presidential Proclamation No. 5916 of November 28, 1988, will be established in accordance with paragraph (c)(1) except as provided in paragraph (c)(3) (ii of this section).

(ii) Notwithstanding paragraph (b)(4) of this section, certification required to establish supplementary eligibility for licenses for the additional TSUS item 950.10 (Harmonized Tariff Schedule of the United States subheading 9904.10.42) from Uruguay for 1988 must be postmarked no earlier than December 8, 1988, and no later than December 23, 1988. Importers who have already submitted supplementary license certification for the application period which ended November 1, 1987, may simply request license for this additional article for 1988 by submitting a letter without further documentation postmarked as required in this paragraph.

(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.

re

(3) Any licensee who fails to enter at least 85 percent of a particular nonhistorical or supplementary quota share for any article for a given year will be ineligible to have such nonhistorical or supplementary quota share newed 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 li

censee the priority accorded under § 6.26(b)(3)(i) of this part

(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 parties-in-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 successorin-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-in-interest, 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; 52 FR 32529, Aug. 28, 1987; 53 FR 49546, Dec. 8, 1988]

§ 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.