654.113 Typewriters etc./20

The Secretary of State to the Chargé in Switzerland ( Bigelow )

No. 3640

Sir: The attention of the Department has recently been directed to a regulation of the Swiss customs service, issued February 1, 1936, imposing a stamp tax on payments of duties on practically all imported [Page 806] products. The regulation was published in the Feuille Fédérate of February 5, 1936, and was issued pursuant to a Federal decree of January 31, 1936.

The tax provided amounts to four percent of the total amount of the duty on all except certain limited categories of goods. Shipments of goods weighing 2,000 gross kilos or more which are subject to a duty of one franc or less per 100 gross kilos are taxable at two percent of the total duty. Duty-free goods and specified classes of gasoline and tobacco are exempt from the tax.

While the Department is without advice from your office as to this tax, it would appear from information supplied by the Woodstock Typewriter Company that the tax is being levied in connection with imports of American typewriters. It is the Department’s opinion that the imposition of an additional tax of such a nature on products with respect to which duty assurances were given the United States in the trade agreement would constitute a violation of the obligations assumed by the Swiss Government under Article I of the agreement, which provides, in part, that the articles specified in Section A of Schedule I “shall also be exempt from all other duties, taxes, fees, charges or exactions, imposed on or in connection with importation, in excess of those imposed on the day of the signature of this Agreement or required to be imposed thereafter under laws of Switzerland in force on the day of the signature of this Agreement.” The interpretation placed upon this commitment by the Government of the United States, namely that it prohibits any increase after the day of the signature of the agreement in charges, on or in connection with importation, which are imposed on the day of signature of the agreement or are required to be imposed thereafter under laws in force on that day, was made clear to the Swiss negotiators prior to the signature of the agreement. The Department believes that this intent of the Article is explicit in both the English and French texts of the agreement.

You are accordingly requested to ascertain whether the tax in question is levied on imports of American goods listed in Section A of Schedule I of the agreement, and, if so, whether the tax was required to be imposed by laws of Switzerland in effect on the day of signature of the agreement. In the event you find that the tax is being imposed in violation of the stipulations of the agreement upon the products on which duty assurances were given the United States, you are requested to take the matter up with the competent Swiss authorities with a view to securing the exemption of these products from the tax.

The Department recognizes that the tax, if applied in the manner which would appear to be indicated by the language of the order of February 1, 1936, does not discriminate against the United States, and [Page 807] it does not question the good faith of the Swiss Government in levying the tax for revenue purposes. However, it is felt that, if a violation of the agreement is allowed to go unchallenged in this instance, a precedent may be established for the levying of further taxes in connection with imports which might have the effect of nullifying the concessions in the trade agreement.

An instruction with respect to the tax and the import permit system established by the Swiss authorities in connection with the importation of lard, which were dealt with in your telegram No. 51, of June 9, 1936, and your despatches Nos. 4383 and 4389, dated June 3 and June 9,13 respectively, will be transmitted to you in the near future.

Very truly yours,

For the Secretary of State:
Francis B. Sayre
  1. Despatches not printed.