44, 698

Senator GRUENING. The next witness will be Mr. Jonathan Rintels, Office of the General Counsel, Department of Commerce, accompanied by Mr. Walter Schneider.

The Department of Commerce is a very important factor in this legislation, and we would like to have your views.

Who is going to testify first?

Mr. RINTELS. I will proceed if I may, Mr. Chairman.

STATEMENT OF JONATHAN B. RINTELS, COUNSEL FOR THE FOREIGN EXCESS PROPERTY OFFICER, OFFICE OF THE GENERAL COUNSEL, DEPARTMENT OF COMMERCE; ACCOMPANIED BY WALTER SCHNEIDER

Mr. RINTELS. My name is Jonathan Rintels. I am a member of the Office of General Counsel of the Department of Commerce, and I have served as counsel for the Foreign Excess Property Officer for the past 6 years.

Senator GRUENING. That ought to make you pretty expert in this field.

Mr. RINTELS. Sir, I feel sometimes the longer I serve the less I know.

Senator GRUENING. That is a universal experience.

Mr. RINTELS. At any rate, I would like to express our appreciation on behalf of the Secretary for the opportunity which you are giving us to appear here and comment on S. 3154.

As I am sure is well known to the chairman, the Commerce Department has had the major responsibility in connection with determining of whether foreign excess property may be imported into the United States, ever since 1949. And this responsibility of course derives from section 402 of the Federal Property and Administrative Services Act of 1949, which provides that such property may be sold only with a condition forbidding its importation except upon the basis of a determination by either the Secretary of Agriculture or the Secretary of Commerce, depending upon the type of property, that importation would relieve a domestic shortage or would otherwise be beneficial to our domestic economy.

On March 22 of this year, the Under Secretary of Commerce, Mr. Philip A. Ray, informed the chairman of the Senate Committee on Government Operations by letter that the Department endorses the desirability of amendatory legislation on the subject of foreign excess property, but that we were making some proposals for changes in the pending bills. And our position then and now is contained in the statement of Mr. William A. White, Sr., who is the Administrator of the Business and Defense Services Administration within the Department, to which the responsibility under this law has been delegated.

That statement, I think, was provided with our letter, and is also in the record of the House hearings, and is in the report which the House committe filed when it reported the bill to the House.

Senator GRUENING. We will be glad to include this in the record. Mr. RINTELS. I would appreciate it, sir.

(The report referred to follows:)

REPORT OF U.S. DEPARTMENT OF COMMERCE, BUSINESS AND DEFENSE SERVICES ADMINISTRATION, ON OPERATIONS OF THE FOREIGN PROPERTY OFFICE DURING CALENDAR YEAR 1959

On January 15, 1959, the Business and Defense Services Administration of the Department of Commerce promulgated Foreign Excess Property Order No. 1 (revised). This order restated and expanded upon various procedural matters relating to the administration of the Department's responsibilities under section 402 of the Federal Property and Administrative Services Act of 1949. The revised order revoked and superseded Foreign Excess Property Order No. 1, issued on August 23, 1950.

On June 23, 1959, Foreign Excess Property Order No. 1 (revised) was amended to permit importation in bond for restricted use or special processing of foreign excess property which would not otherwise be eligible for entry. Under this amendment, for example, tires are admitted for recapping to relieve the continuing shortage of recappable carcasses.

A second amendment effective October 22, 1959, contained three changes in the rules. These changes clarified the definition of foreign excess property by specifically excluding property of lend-lease origin; redefined the functions of certain BDSA officials; and authorized importation without an FEP import authorization of these kinds of metal scrap for which import duties imposed pursuant to the Tariff Act of 1930 are suspended by law or with respect to which no such duties are imposed.

Concurrently with the issuance of Foreign Excess Property Order No. 1 (revised) there was also issued as part of the BDSA Manual of Management and Operating Instructions, Operating Instruction No. 18. "Foreign Excess Property."

This 22-page instruction contains the definitions, criteria, and principles of the order, assigns duties and responsibilities, and specifies working procedure and control records. Appropriate modifications were made as a result of the June and October amendments to the order and as a result of several improved. operating techniques.

Closer liaison was established and maintained during the year with the Bureau of Customs of the Treasury Department. On January 27, 1959, that agency issued Special Circular No. 24, which had previously been cleared in the Department of Commerce. This circular was directed to the collectors of customs and appraisers of merchandise in the customs offices and ports of entry. It redescribed the duties and responsibilities of those offices in regard to the importation of foreign excess property and explained the new procedures made necessary by the revisions in Foreign Excess Property Order No. 1 (revised). Four supplements to Special Circular No. 24 were issued during the year in further clarification of procedural matters.

As shown in table 1, during calendar year 1959, 286 applications were filed requesting FEP import determinations. When combined with the carryover of 19 cases pending at the beginning of the year and 65 cases which were reopened for reconsideration at the request of the applicants, there was a total workload of 370 cases during the year.

There were 374 actions completed during 1959. This total includes 15 cases which are counted twice since they were partially approved and partially disapproved. Of the 374 actions, 272 or 73 percent were disapprovals and 68 or 18 percent were approvals. At the end of the year 11 applications were awaiting disposition.

Requests to extend the FEP import authorization period beyond the original 6 months were granted in three cases and denied in seven. The remaining 24 cases were closed through correspondence.