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Federal Register / Vol. 86, No. 107 / Monday, June 7, 2021 / Notices
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 USTR20200022.
Under section 303 of the Trade Act, the U.S. Trade Representative requested consultations with the government of Austria regarding the issues involved in the investigation. Consultations were held on December 21, 2020. Based on information obtained during the investigation, USTR prepared a comprehensive report on Austrias DST, which 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 Austrias DST, and supports findings that Austrias DST is unreasonable and discriminatory and burdens or restricts U.S commerce. On January 14, 2021, based on the information obtained during the investigation and the advice of the Section 301 Committee, the U.S.
Trade Representative determined that Austrias DST is unreasonable or discriminatory and burdens or restricts U.S. commerce, and therefore is actionable under sections 301b and 304a of the Trade Act. See 86 FR 6406
January 21, 2021.
On March 31, 2021, USTR issued a notice proposing that appropriate action would include additional ad valorem duties of up to 25 percent on products of Austria to be drawn from a list of 40
tariff subheadings of the Harmonized Tariff Schedule of the United States HTSUS included in the annex to that notice. The March 31, 2021 notice requested comments on the proposed action as well as on other potential actions in the investigation. Witnesses provided testimony at public hearings held on May 3 and May 6, 2021, and interested persons filed written comments. Transcripts from the hearings are available on the USTR
website at: https ustr.gov/issue-areas/
enforcement/section-301-investigations/
section-301-digital-services-taxes. The written public submissions are available at: https comments.ustr.gov/s/
docket?docketNumber=USTR-20210002 and https comments.ustr.gov/s/
docket?docketNumber=USTR-20210008.

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II. Determination of Action To Be Taken in the Investigation In accordance with section 301b of the Trade Act, the U.S. Trade Representative has determined that action is appropriate in this investigation. Section 301b 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 301c of the Trade Act, 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 301b, to obtain the elimination of that act, policy, or practice. Section 304a2B provides that the U.S. Trade Representative shall make the determination of what action to take on or before the date that is 12 months after the date on which the investigation was initiated, or in this case, by June 2, 2021.
Pursuant to sections 301b and c of the Trade Act, and in accordance with the advice of the Section 301
Committee, the U.S. Trade Representative has determined that appropriate action is the imposition of ad valorem duties of 25 percent on products of Austria specified in Annex A to this notice. Annex A contains a list of 23 tariff subheadings, with an estimated trade value for calendar year 2019 of approximately $65 million. In making this determination, the U.S.
Trade Representative considered the public comments submitted in the investigation, as well as advice of advisory committees. In determining the level of trade covered by the additional duties, the U.S. Trade Representative considered the value of digital transactions covered by Austrias DST
and the amount of taxes assessed by Austria on U.S. companies. Estimates indicate that the value of the DST
payable by U.S.-based company groups to Austria will be up to approximately $45 million per year. The level of trade covered by the action takes into account estimates of the amount of tariffs to be collected on goods of Austria and the estimates of the amount of taxes assessed by Austria.
Section 305a of the Trade Act provides, in pertinent part, that the U.S.
Trade Representative may delay implementation of the action to be taken for up to 180 days if the Trade Representative determines . . . that a delay is necessary or desirable . . . to
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obtain . . . a satisfactory solution with respect to the acts, policies, or practices that are the subject of the action.
Pursuant to section 305a, the U.S.
Trade Representative has determined to suspend the additional duties for up to 180 days that is, up to November 29, 2021 to allow additional time for multilateral and bilateral discussions that could lead to a satisfactory resolution of this matter.
In order to implement this determination, subchapter III of chapter 99 of the HTSUS is modified by Annex A of this notice. Annex A is effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on November 29, 2021, which is 180 days after the determination of action. In the event the U.S. Trade Representative determines that the suspension of the additional duties should be for less than a period of 180 days, USTR will issue a subsequent notice amending the effective date. For informational purposes, Annex B contains a list of the tariff subheadings covered by the tariff action along with short product descriptions. In all cases, the formal language in Annex A governs the tariff treatment of products covered by the action. As specified in Annex A, products provided for in new HTSUS
heading 9903.90.02 will be subject to an additional ad valorem duty of 25
percent. The additional duties provided for in the new HTSUS heading established by Annex A apply in addition to all other applicable duties, fees, exactions, and charges. Any product listed in Annex A, except any product that is eligible for admission under domestic status as defined in 19
CFR 146.43, which is subject to the additional duty imposed by this determination, and is admitted into a U.S. foreign trade zone on or after 12:01
a.m. eastern standard time on November 29, 2021, only may be admitted as privileged foreign status as defined in 19 CFR 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.
The U.S. Trade Representative will continue to monitor the effect of the trade action, the progress of discussions in the Organisation for Economic Cooperation and Development and G20, the progress of discussions with Austria, and may adopt appropriate modifications. If a modification to the action may be appropriate, the U.S.
Trade Representative will consider the
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