611.5131/1700

The Chargé in France ( Wilson ) to the Secretary of State

No. 521

Sir: I have the honor to refer to the Embassy’s despatch No. 412 of March 8, 1937, pointing out certain items in the new French tariff the rates upon which appeared to have been increased in contravention of the provisions of the Franco-American Trade Agreement, and to enclose herewith a copy and translation of a note from the Ministry of Foreign Affairs of April 6, 1937,5 in reply to the Embassy’s representations in this regard.

The Department will note the statement of the Ministry of Foreign Affairs to the effect that the object of the Fiscal Reform Law was the suppression, by inclusion in the customs tariff, of the statistical, customs and stamp taxes (“taxes de statistique, des formalites douanières et de timbre”) which had previously been collected separately at the time of importation. The idea behind this reform was that all taxes due at the time of importation might be paid at one time to one agent rather than several times to several agents. The Ministry maintains that as a matter of fact the total charges imposed upon American products on importation into France have not been increased above those imposed at the time of the signature [Page 278] of the Franco-American Trade Agreement, and that for this reason the French Government did not feel that the provisions of Article 1, paragraph 5, of the Agreement need be taken into consideration.

Informal inquiry made by the Commercial Attaché indicates that the taxes in question, which have been suppressed and consolidated, that is, the “taxes de statistique, des formalités douanières et de timbre,” as established by the Customs Code of 1934, were formerly levied at the rate of 1 franc per ton or fraction of a ton, but in no case at a rate of less than 2% ad valorem, on all commodities cleared through the customs. He found that in view of the fact that these taxes were calculated on either a weight or an ad valorem basis, in order to merge them with the customs duties which are mostly on a specific duty basis, the customs authorities were obliged to compute entirely new tariff rates. It appears that this was done on a basis of actual returns during 1936, by calculating the percentage relationship between the amount of the statistical taxes collected and the amount of the duties collected. Apparently this relationship worked out at 2.5 %. Accordingly, in computing the new tariff rates, each former rate was increased by 2.5% rounded out for convenience.

In view of these facts and in the absence of any complaints from the American exporters, the Embassy would be inclined to acquiesce without protest in the position taken by the French Government in the premises.

Respectfully yours,

Edwin C. Wilson
  1. Not printed.