[Federal Register: July 15, 2003 (Volume 68, Number 135)]
[Notices]
[Page 41845-41846]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jy03-89]
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DEPARTMENT OF LABOR
Employment and Training Administration
[TA-W-50,129 and TA-W-50,129A]
IBM Corporation, Global Services Division, Piscataway, NJ, and
IBM Corporation, Global Services Division, Middletown, NJ; Notice of
Negative Determination Regarding Application for Reconsideration
By application of April 29, 2003, a petitioner requested
administrative reconsideration of the Department's negative
determination regarding eligibility for workers and former workers of
the subject firm to apply for Trade Adjustment Assistance (TAA). The
denial notice applicable to workers of IBM Corporation, Global Services
Division, Piscataway and Middletown, New Jersey was signed on March 26,
2003, and published in the Federal Register on April 7, 2003 (68 FR
16834).
Pursuant to 29 CFR 90.18(c) reconsideration may be granted under
the following circumstances:
(1) If it appears on the basis of facts not previously considered
that the determination complained of was erroneous;
(2) if it appears that the determination complained of was based on
a mistake in the determination of facts not previously considered; or
(3) if in the opinion of the Certifying Officer, a
misinterpretation of facts or of the law justified reconsideration of
the decision.
The TAA petition was filed on behalf of workers at IBM Corporation,
Global Services Division, Piscataway and Middletown, New Jersey engaged
in analysis and maintenance of computer software and information
systems. The petition was denied because the petitioning workers did
not produce an article within the meaning of section 222 of the Act.
The petitioner asserts that the negative decision for the
petitioning worker group came as a result of an overly narrow and
antiquated interpretation of production as stipulated in the Trade Act.
The petitioner also asserts that software is different from services in
that one does not need a software ``worker'' to operate software.
Software and information systems are not listed on the Harmonized
Tariff Schedule of the United States (HTSUS), published by the United
States International Trade Commission (USITC), Office of Tariff Affairs
and Trade Agreements, which describes all ``articles'' imported to or
exported from the United States. This codification represents an
international standard maintained by most industrialized countries as
established by the International Convention on the Harmonized Commodity
Description and Coding (also known as the HS Convention).
The Trade Adjustment Assistance (TAA) program was established to
help workers who produce articles and who lose their jobs as a result
of increases in imports of articles like or directly competitive with
those produced at the workers' firm.
Throughout the Trade Act an article is often referenced as
something that can be subject to a duty. To be subject to a duty on a
tariff schedule, an article will have a value that makes it marketable,
fungible and interchangeable for commercial purposes. But, although a
wide variety of tangible products are described as articles and
characterized as dutiable in the HTSUS, software and associated
information technology
[[Page 41846]]
services are not listed in the HTSUS. Such products are not the type of
employment work products that Customs officials inspect and that the
TAA program was generally designed to address.
A National Import Specialist was contacted at the U.S. Customs
Service to address whether software could be described as an import
commodity. The Import Specialist confirmed that electronically
transferred material is not a tangible commodity for U.S. Customs
purposes. In cases where software is encoded on a medium (such as a CD
Rom or floppy diskette), the software is given no import value, but
rather evaluated exclusively on the value of the carrier medium. This
standard is based on Treasury Decision 85-124 as issued on July 8, 1985
by the U.S. Customs Service. In conclusion, this decision states that
``in determining the customs value of imported carrier media bearing
data or instructions, only the cost or value of the carrier medium
itself shall be taken into account. The customs value shall not,
therefore, include the cost or value of the data or instructions,
provided that this is distinguished from the cost or the value of the
carrier medium.''
Finally, the North American Industry Classification System (NAICS),
published by the U.S. Department of Commerce, designates all manner of
custom software applications and software systems, including analysis,
development, programming, and integration as ``Services'' (see NAICS
541511 and 541512.)
Only in very limited instances are service workers certified for
TAA, namely the worker separations must be caused by a reduced demand
for their services from a parent or controlling firm or subdivision
whose workers produce an article and who are currently under
certification for TAA.
Conclusion
After review of the application and investigative findings, I
conclude that there has been no error or misinterpretation of the law
or of the facts which would justify reconsideration of the Department
of Labor's prior decision. Accordingly, the application is denied.
Signed at Washington, DC, this 26th day of June, 2003.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. 03-17823 Filed 7-14-03; 8:45 am]
BILLING CODE 4510-30-P