The Acting Secretary of State to the Chargé in France (Armour)
361. Your despatch 8934, September 10.23
(1) You may make the following reply to French proposal transmitted with despatch 8272, January 31:
“The Government of the United States has given most careful consideration to the suggestions made by the French Government in its memorandum of January 27, 1928, concerning verification of valuations for customs purposes of French exports to the United States.
The suggestion is noted that the agents of the United States Treasury Department might be attached to the American consular authorities in France with a view to verification of invoices and other documents pertaining to exportations. In this connection it should be pointed out that the activities of such agents relate almost entirely to specific investigations based upon inquiries from appraising officers in the United States as to market values, and that both the invoices and the reports of such agents, while carrying much weight, are in any case only advisory in the determination of dutiable value, which by law cannot be established until entry of the goods into the United States. Accordingly verification of documents submitted to consular authorities would not be sufficient.
The French Government further suggests (a) that exporters might have the opportunity of submitting to the American customs agents bills of sale, contracts and correspondence relating to the transactions in question, or (b) that any verification of declarations made by French exporters deemed necessary by the American authorities should be effected by experts of French nationality, whose verification would be final except in case of a suspicion of fraud or substitution of merchandise.
The Government of the United States, of course, has no objection to French exporters submitting to American Treasury agents bills of sale, contracts and correspondence relating to export shipments. It should be understood, however, that determination of the weight to be given to such documents is, under American law, a matter for the appraiser, who has the duty and sole responsibility of fixing finally the value of imported merchandise, subject only to appeal to re-appraisement, by the Government or the importer, before the United States Customs Court. Thus, Section 500 of the Tariff Act of 1922.24 charges the appraiser with the following duties: (Here quote subparagraphs (1) and (3) of paragraph (a) and sub-paragraph (d) through the words “appraisement or report”). It will accordingly be appreciated that there is no authority warranting the transfer of the power of appraisement from the appraiser to other parties.
Moreover, the proposal regarding verification by experts of French nationality contemplates imposing fundamental responsibility on such [Page 828]experts. In this connection it may be pointed out that the law provides (Revised Statutes, Section 2616) that persons appointed in connection with administration of the customs laws of the United States must take an oath to prevent and detect frauds against these laws, embodying the following declaration: (Here quote oath set forth Section 1757 Revised Statutes). It is apparent that such an oath could not appropriately be taken by a national of a foreign country.
It is greatly regretted that for the aforementioned reasons the procedure suggested by the French Government cannot be adopted. The Government of the United States, however, would be disposed to give attentive consideration to any alternative procedure, meeting the requirements of existing American and French law, that the French Government may propose.
With reference to the inquiry of the French Government concerning the privileges that might be accorded in the United States, as a matter of reciprocity, to French agents that might be appointed with a view to verification of declarations of American exporters, the Government of the United States is happy to assure the French Government that it would interpose no objection to activities on the part of such agents on lines similar to those on which American Treasury agents may be authorized to operate in France. It should be noted in this connection that Canada, South Africa, and Australia at the present time maintain customs agents in the United States whose duties are substantially similar to those of American customs agents in foreign countries and that no objection to their activities in this country has been raised by this Government.”
(2) Department notes suggestions in final paragraph memorandum of September 627 accompanying despatch 8934 that France might welcome compromise arrangement. Since the present arrangement was agreed to at the instance of the French Government, Department hesitates to make any formal proposal looking toward investigation of private French books and records by Treasury Agents. This Government, however, is anxious to avoid placing obstacles in the way of importations from France by reason of application of United States value which may occasionally be necessary under the law in cases where records of French business men may not be examined. If, as has been intimated, the French Government is prepared to state that American Treasury agents, without taking any initiative, might be authorized to examine such private French books and records as interested French business men may voluntarily submit to them, this Government would gladly agree. You will, however, carefully explain that appraisement on United States value will not be avoided entirely by the examination of books and records, the law providing substantially that appraisement shall be on United States value in cases where foreign or export value as defined in tariff law cannot be ascertained to satisfaction of appraising officer. Investigations are [Page 829]helpful in establishing foreign or export value and serve to reduce recourse to application of United States value.
If you make this suggestion to the French Government, you should do so orally, referring to the ante-penultimate sentence of above quoted communication. You should state, however, that in view of the correspondence of last fall, the Government of the United States would desire a written communication by the French Government in the sense indicated.
[Paraphrase.] (3) Tobacco interests, mentioned in enclosure of despatch 8934, are, according to Department information, in touch with French exporters who may be approaching the French Government now in the matter. If this is so, it would appear to be opportune moment for you to present the above communication in writing together with an oral statement along lines indicated. [End paraphrase.]