Section 15CFR301.5

[Code of Federal Regulations]
[Title 15, Volume 2]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 15CFR301.5]

[Page 12-17]

TITLE 15--COMMERCE AND FOREIGN TRADE

CHAPTER III--INTERNATIONAL TRADE ADMINISTRATION, DEPARTMENT OF COMMERCE

PART 301--INSTRUMENTS AND APPARATUS FOR EDUCATIONAL AND SCIENTIFIC INSTITUTIONS--Table of Contents

Sec. 301.5 Processing of applications by the Department of Commerce.

(a) Public notice and opportunity to present views. (1) Within 5
days of receipt of an application from the Commissioner, the Director
shall make a copy available for public inspection during ordinary
business hours of the Department of Commerce. Unless the Director
determines that an application has deficiencies which preclude
consideration on its merits (e.g., insufficient description of intended
purposes to rule on the scientific equivalency of the foreign instrument
and potential domestic equivalents), he shall publish in the Federal
Register a notice of the receipt of the application to afford all
interested persons a reasonable opportunity to present their views with
respect to the question ``whether an instrument or apparatus of
equivalent scientific value for the purpose for which the article is
intended to be used is being manufactured in the United States.'' The
notice will include the application number, the name and address of the
applicant, a description of the instrument(s) for which duty-free entry
is requested, the name of the foreign manufacturer and a brief summary
of the applicant's intended purposes extracted from the applicant's
answer to question 7 of the application. In addition, the notice shall
specify the date the application was accepted by the Commissioner for
transmittal to the Department of Commerce.
(2) If the Director determines that an application is incomplete or
is otherwise deficient, he may request the applicant to supplement the
application, as appropriate, prior to publishing the notice of
application in the Federal Register. Supplemental information/material
requested under this provision shall be supplied to the Director in two
copies within 20 days of the date of the request and shall be subject to
the certification on the form. Failure to provide the requested
information on time shall result in a denial of the application without
prejudice to resubmission pursuant to paragraph (e) of this section.
(3) Requirement for presentation of views (comments) by interested
persons. Any interested person or government agency may make written
comments to the Director with respect to the question whether an
instrument of equivalent scientific value, for the purposes for which
the foreign instrument is intended to be used, is being manufactured in
the United States. Except for comments specified in paragraph (a)(4) of
this section, comments should be in the form of supplementary answers to
the applicable questions on the application form. Comments must be
postmarked no later than 20 days from the date on which the notice of
application is published in the Federal Register. In order to be
considered, comments and related attachments must be submitted to the
Director in duplicate; shall state the name, affiliation and address of
the person submitting the comment; and shall

[[Page 13]]

specify the application to which the comment applies. In order to
preserve the right to appeal the Director's decision on a particular
application pursuant to Sec. 301.6 of these regulations, a domestic
manufacturer or other interested person must make timely comments on the
application. Separate comments should be supplied on each application in
which a person has an interest. However, brochures, pamphlets, printed
specifications and the like, included with previous comments, if
properly identified, may be incorporated by reference in subsequent
comments.
(4) Comments by domestic manufacturers. Comments of domestic
manufacturers opposing the granting of an application should:
(i) Specify the domestic instrument considered to be scientifically
equivalent to the foreign article for the applicant's specific intended
purposes and include documentation of the domestic instrument's
guaranteed specifications and date of availability.
(ii) Show that the specifications claimed by the applicant in
response to question 8 to be pertinent to the intended purpose can be
equaled or exceeded by those of the listed domestic instrument(s)
whether or not it has the same design as the foreign instrument; that
the applicant's alleged pertinent specifications should not be
considered pertinent within the meaning of Sec. 301.2(s) of the
regulations for the intended purposes of the instrument described in
response to question 7 of the application; or that the intended purposes
for which the instrument is to be used do not qualify the instrument for
duty-free consideration under the Act.
(iii) Where the comments regarding paragraphs (a)(4)(i) and
(a)(4)(ii) of this section relate to a particular accessory or optional
device offered by a domestic manufacturer, cite the type, model or other
catalog designation of the accessory device and include the
specification therefor in the comments.
(iv) Where the justification for duty-free entry is based on
excessive delivery time, show whether:
(A) The domestic instrument is as a general rule either produced for
stock, produced on order, or custom-made and;
(B) An instrument or apparatus of equivalent scientific value to the
article, for the purposes described in response to question 7, could
have been produced and delivered to the applicant within a reasonable
time following the receipt of the order.
(v) Indicate whether the applicant afforded the domestic
manufacturer an opportunity to furnish an instrument or apparatus of
equivalent scientific value to the article for the purposes described in
response to question 7 and, if such be the case, whether the applicant
issued an invitation to bid that included the technical requirements of
the applicant.
(5) Untimely comments. Comments must be made on a timely basis to
ensure their consideration by the Director and the technical
consultants, and to preserve the commenting person's right to appeal the
Director's decision. The Director, at his discretion, may take into
account factual information contained in untimely comments.
(6) Provision of general comments. A domestic manufacturer who does
not wish to oppose duty-free entry of a particular application, but who
desires to inform the Director of the availability and capabilities of
its instrument(s), may at any time supply documentation to the Director
without reference to a particular application. Such documentation shall
be taken into account by the Director when applications involving
comparable foreign instruments are received. The provision of general
comments does not preserve the provider's right to appeal the Director's
decision.
(b) Additions to the record. The Director may solicit from the
applicant, from foreign or domestic manufacturers, their agents, or any
other person or Government agency considered by the Director to have
related competence, any additional information the Director considers
necessary to make a decision. The Director may attach conditions and
time limitations upon the provision of such information and may draw
appropriate inferences from a person's failure to provide the requested
information.
(c) Advice from technical consultants.
(1) The Director shall consider any written advice from the
Secretary of

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HHS, or his delegate, on the question whether a domestic instrument of
equivalent scientific value to the foreign instrument, for the purposes
for which the instrument is intended to be used, is being manufactured
in the United States.
(2) After the comment period has ended (Sec. 301.5(a)(3)), the
complete application and any comments received and related information
are forwarded to appropriate technical consultants for their advice.
(3) The technical consultants relied upon for advice include, but
are not limited to, the National Institutes of Health (delegated the
function by the Secretary of HHS), the National Institute of Standards
and Technology and the National Oceanographic and Atmospheric
Administration.
(d) Criteria for the determinations of the Department of Commerce--
(1) Scientific equivalency. (i) The determination of scientific
equivalency shall be based on a comparison of the pertinent
specifications of the foreign instrument with similar pertinent
specifications of comparable domestic instruments (see Sec. 301.2(s) for
the definition of pertinent specification). Ordinarily, the Director
will consider only those performance characteristics which are
``guaranteed specifications'' within the meaning of Sec. 301.2(r) of
this part. In no event, however, shall the Director consider performance
capabilities superior to the manufacturer's guaranteed specifications or
their equivalent. In making the comparison the Director may consider a
reasonable combination of domestic instruments that brings together two
or more functions into an integrated unit if the combination of domestic
instruments is capable of accomplishing the purposes for which the
foreign instrument is intended to be used. If the Director finds that a
domestic instrument possesses all of the pertinent specifications of the
foreign instrument, he shall find that there is being manufactured in
the United States an instrument of equivalent scientific value for such
purposes as the foreign instrument is intended to be used. If the
Director finds that the foreign instrument possesses one or more
pertinent specifications not possessed by the comparable domestic
instrument, the Director shall find that there is not being manufactured
in the United States an instrument of equivalent scientific value to the
foreign instrument for such purposes as the foreign instrument is
intended to be used.
(ii) Programs that may be undertaken at some unspecified future date
shall not be considered in the Director's comparison. In making the
comparison, the Director shall consider only the instrument and
accompanying accessories described in the application and determined
eligible by the U.S. Customs Service. The Director shall not consider
the planned purchase of additional accessories or the planned adaptation
of the article at some unspecified future time.
(iii) In order for the Director to make a determination with respect
to the ``scientific equivalency'' of the foreign and domestic
instruments, the applicant's intended purposes must include either
scientific research or science-related educational programs. Instruments
used exclusively for nonscientific purposes have no scientific value,
thereby precluding the requisite finding by the Director with respect to
``whether an instrument or apparatus of equivalent scientific value to
such article, for the purposes for which the article is intended to be
used, is being manufactured in the United States.'' In such cases the
Director shall deny the application for the reason that the instrument
has no scientific value for the purposes for which it is intended to be
used. Examples of nonscientific purposes would be the use of an
instrument in routine diagnosis or patient care and therapy (as opposed
to clinical research); in teaching a nonscientific trade (e.g.,
printing, shoemaking, metalworking or other types of vocational
training); in teaching nonscientific courses (e.g., music, home
economics, journalism, drama); in presenting a variety of subjects or
merely for presenting coursework, whether or not science related (e.g.,
video tape editors, tape recorders, projectors); and in conveying
cultural information to the public (e.g., a planetarium in the
Smithsonian Institution).
(2) Manufactured in the United States. An instrument shall be
considered as being manufactured in the United

[[Page 15]]

States if it is customarily ``produced for stock,'' ``produced on
order'' or ``custom-made'' within the United States. In determining
whether a U.S. manufacturer is able and willing to produce an
instrument, and have it available without unreasonable delay, the normal
commercial practices applicable to the production and delivery of
instruments of the same general category shall be taken into account, as
well as other factors which in the Director's judgment are reasonable to
take into account under the circumstances of a particular case. For
example, in determining whether a domestic manufacturer is able to
produce a custom-made instrument, the Director may take into account the
production experience of the domestic manufacturer including (i) the
types, complexity and capabilities of instruments the manufacturer has
produced, (ii) the extent of the technological gap between the
instrument to which the application relates and the manufacturer's
customary products, (iii) the manufacturer's technical skills, (iv) the
degree of saturation of the manufacturer's production capability, and
(v) the time required by the domestic manufacturer to produce the
instrument to the purchaser's specification. Whether or not the domestic
manufacturer has field tested or demonstrated the instrument will not,
in itself, enter into the decision regarding the manufacturer's ability
to manufacture an instrument. Similarly, in determining whether a
domestic manufacturer is willing to produce an instrument, the Director
may take into account the nature of the bid process, the manufacturer's
policy toward manufacture of the product(s) in question, the minimum
size of the manufacturer's production runs, whether the manufacturer has
bid similar instruments in the past, etc. Also, if a domestic
manufacturer was formally requested to bid an instrument, without
reference to cost limitations and within a leadtime considered
reasonable for the category of instrument involved, and the domestic
manufacturer failed formally to respond to the request, for the purposes
of this section the domestic manufacturer would not be considered
willing to have supplied the instrument.
(3) Burden of proof. The burden of proof shall be on the applicant
to demonstrate that no instrument of equivalent scientific value for the
purposes for which the foreign instrument is to be used is being
manufactured in the United States. Evidence of applicant favoritism
towards the foreign manufacturer (advantages not extended to domestic
firms, such as additional lead time, know-how, methods, data on
pertinent specifications or intended uses, results of research or
development, tools, jigs, fixtures, parts, materials or test equipment)
may be, at the Director's discretion, grounds for rejecting the
application.
(4) Excessive delivery time. Duty-free entry of the instrument shall
be considered justified without regard to whether there is being
manufactured in the United States an instrument of equivalent scientific
value for the intended purposes if excessive delivery time for the
domestic instrument would seriously impair the accomplishment of the
applicant's intended purposes. For purposes of this section, (i) except
when objective and convincing evidence is presented that, at the time of
order, the actual delivery time would significantly exceed quoted
delivery time, no claim of excessive delivery time may be made unless
the applicant has afforded the domestic manufacturer an opportunity to
quote and the delivery time for the domestic instrument exceeds that for
the foreign instrument; and (ii) failure by the domestic manufacturer to
quote a specific delivery time shall be considered a non-responsive bid
(see Sec. 301.5(d)(2)). In determining whether the difference in
delivery times cited by the applicant justifies duty-free entry on the
basis of excessive delivery time, the Director shall take into account
(A) the normal commercial practice applicable to the production of the
general category of instrument involved; (B) the efforts made by the
applicant to secure delivery of the instruments (both foreign and
domestic) in the shortest possible time; and (C) such other factors as
the Director finds relevant under the circumstances of a particular
case.
(5) Processing of applications for components. (i) The Director may
process an application for components which

[[Page 16]]

are to be assembled in the United States into an instrument or apparatus
which, due to its size, cannot be imported in its assembled state (see
Sec. 301.2(k)) as if it were an application for the assembled
instrument. A finding by the Director that no equivalent instrument is
being manufactured in the United States shall, subject to paragraph
(d)(5)(ii) of this section, qualify all the associated components,
provided they are entered within the period established by the Director,
taking into account both the scientific needs of the importing
institution and the potential for development of related domestic
manufacturing capacity.
(ii) Notwithstanding a finding under paragraph (d)(5)(i) of this
section that no equivalent instrument is being manufactured in the
United States, the Director shall disqualify a particular component for
duty-free treatment if the Director finds that the component is being
manufactured in the United States.
(e) Denial without prejudice to resubmission (DWOP). The Director
may, at any stage in the processing of an application by the Department
of Commerce, DWOP an application if it contains any deficiency which, in
the Director's judgment, prevents a determination on its merits. The
Director shall state the deficiencies of the application in the DWOP
letter to the applicant.
(1) The applicant has 60 days from the date of the DWOP to correct
the cited deficiencies in the application unless a request for an
extension of time for submission of the supplemental information has
been received by the Director prior to the expiration of the 60-day
period and is approved.
(2) If granted, extensions of time will generally be limited to 30
days.
(3) Resubmissions must reference the application number of the
earlier submission. The resubmission may be made by letter to the
Director. The record of a resubmitted application shall include the
original submission on file with the Department. Any new material or
information contained in a resubmission, which should address the
specific deficiencies cited in the DWOP letter, should be clearly
labeled and referenced to the applicable question on the application
form. The resubmission must be for the instrument covered by the
original application unless the DWOP letter specifies to the contrary.
The resubmission shall be subject to the certification made on the
original application.
(4) If the applicant fails to resubmit within the applicable time
period, the prior DWOP shall, irrespective of the merits of the case,
result in a denial of the application.
(5) The Director shall use the postmark date of the fully completed
resubmission in determining whether the resubmission was made within the
allowable time period. Certified or registered mail, or some other means
which can unequivocally establish the date of mailing, is recommended.
Resubmission by fax, e-mail or other electronic means is acceptable
provided an appropriate return number or address is provided in the
transmittal. Resubmissions must clearly indicate the date of transmittal
to the Director.
(6) The applicant may, at any time prior to the end of the
resubmission period, notify the Director in writing that it does not
intend to resubmit the application. Upon such notification, the
application will be deemed to have been withdrawn. (See Sec. 301.5(g).)
(7) Information provided in a resubmission that, in the judgment of
the Director, contradicts or conflicts with information provided in a
prior submission, or is not a reasonable extension of the information
contained in the prior submission, shall not be considered in making the
decision on an application that has been resubmitted. Accordingly, an
applicant may elect to reinforce an orginal submission by elaborating in
the resubmission on the description of the purposes contained in a prior
submission and may supply additional examples, documentation and/or
other clarifying detail, but the applicant shall not introduce new
purposes or other material changes in the nature of the original
application. The resubmission should address the specific deficiencies
cited in the DWOP. The Director may draw appropriate inferences from the
failure of an applicant to attempt to provide the information requested
in the DWOP.

[[Page 17]]

(8) In the event an applicant fails to address the noted
deficiencies in the response to the DWOP, the Director may deny the
application.
(f) Decisions on applications. The Director shall prepare a written
decision granting or denying each application. However, when he deems
appropriate, the Director may issue a consolidated decision on two or
more applications. The Director shall promptly forward a copy of the
decision to each applicant institution and to the Federal Register for
publication.
(g) Withdrawal of applications. The Director shall discontinue
processing an application withdrawn by the applicant and shall publish
notice of such withdrawal in the Federal Register. If at any time while
its application is pending before the Director, either during the
intital application or resubmission stage, an applicant cancels an order
for the instrument to which the application relates or ceases to have a
firm intention to order such instrument or apparatus, the institution
shall promptly notify the Director. Such notification shall constitute a
withdrawal. Withdrawals shall be considered as having been finally
denied for purposes of Sec. 301.7(c) below.
(h) Nothing in this subsection shall be construed as limiting the
Director's discretion at any stage of processing to insert into the
record and consider in making his decision any information in the public
domain which he deems relevant.

[47 FR 32517, July 28, 1982; 47 FR 34368, Aug. 9, 1982, as amended at 50
FR 11501, Mar. 22, 1985; 66 FR 28833, May 25, 2001]