Section 301 Exclusion Process

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The Office of the U.S. Trade Representative (USTR) previously announced a process to obtain product exclusions from the additional tariffs in effect on certain products imported from China under the U.S. response to China’s unfair trade practices related to the forced transfer of U.S. technology and intellectual property. The 301 lists of products subject to tariffs was determined by a 90-day process that included public hearings and a notice and comment period. You can also find an unofficial spreadsheet with the final 301 lists here.

The USTR also provided an opportunity for the public to request the exclusion of a particular product from the additional duties in order to address situations that warranted excluding a particular product within a subheading, but not the tariff subheading as a whole.

All posted exclusion requests can be found on: https://www.regulations.gov/docket?D=USTR-2018-0025.

The USTR recently announced that it is still in the process of posting exclusion requests due to the high volume of submissions, and therefore there is currently a lag between the filing of an exclusion request and the posting of an exclusion request when public and confidential versions are been filed. The date of posting is the triggering date for initial comments regarding an exclusion requests.  Permissible comments include letters of support as well as opposition.  After the comment period is closed, an additional deadline will be established for rebuttal comments.

As of the date of this report, 815 exclusion requests have been denied.

None have been granted.

We hope you find this report helpful and please contact us if you have any questions.

 

 

 

 

 

 

 

 

 

 

On September 17, 2018, the White House directed the United States Trade Representative (USTR) to implement 10 percent tariffs on nearly all the tariff lines in the original Section 301 List 3 valued at approximately $200 billion. Significantly, the notice does NOT indicate that there will be an exclusion process similar to Section 301 List 1 and 2.

The following day, the USTR issued a press release stating, “The [final] list contains 5,745 full or partial lines of the original 6,031 tariff lines that were on a proposed list of Chinese imports announced on July 10, 2018.”

On September 18, 2018, the USTR published the formal notice of this action in the Federal Register. 83 Fed Reg. 47,974.

For an unofficial downloadable spreadsheet providing affected HTS subheadings across all Section 301 actions, please click here. This includes:

  • Final List 1 ($34 billion);
  • Final List 2 ($16 billion);
  • Original List 3 ($200 billion);
  • Final List 3
    • Part 1 (5,745 lines);
    • Part 2 (11 Partial Lines listing 8-digit lines with their 10-digit exceptions); and
  • The 286 removed HTS codes.

The White House statement said the tariffs will rise to 25 percent on January 1, 2019.

On August 3, 2018, China threatened retaliatory tariffs on $60 billion worth of U.S. goods should President Trump move forward with any tariffs. This would result in a possible List 4.

Check here for the latest developments on all the on-going trade actions.

On September 18, 2018, the United States Trade Representative (USTR) published a notice in the Federal Register explaining the procedures and criteria related to requests for product exclusions from the additional tariffs placed on goods from China on August 23, 2018.

Deadlines

The USTR must receive requests to exclude a particular product by December 18, 2018. Responses to a request for exclusion of a particular product are due 14 days after the request is posted in the docket. Any replies to responses to an exclusion request are due the later of 7 days after the close of the 14 day response period, or 7 days after the posting of a response.

Per the notice, a docket will be opened on regulations.gov for the receipt of exclusion requests. The docket number is USTR–2018–0032. One product is allowed per request. Each request must identify a specific product and the 10-digit HTS. The product exclusion request must include the identity of the product, its physical characteristics and how to differentiate that product from others under the 8-digit HTSUS subheading. The USTR will not consider requests that identify the product using criteria that cannot be made public, or that identify the product by using the producer, importer, customer, chief use, trademark or trade name.

The USTR will periodically announce decisions on exclusion requests. If granted, the exclusion will be retroactively effective starting August 23, 2018 and extend for one year after the date on which the decision is published in the Federal Register.

 

On July 11, 2018, the United States Trade Representative (USTR) opened the docket for China 301 Product Exclusion Requests on regulations.gov. The Docket ID is USTR-2018-0025.

The docket includes USTR’s ‘China 301 Product Exclusion Form’.

In its July 11 Federal Register Notice describing the procedures to use for product exclusion requests, USTR states, “To assist in review of requests for exclusion, USTR has prepared a request form that will be posted on the USTR website under ‘‘Enforcement/Section 301 investigations’’ and on the www.regulations.gov docket in the ‘‘supporting documents’’ section. USTR strongly encourages interested persons to use the form to submit requests.”

The Section 301 exclusion form is more simplified than the earlier Section 232 exclusion form. Interested parties can still submit supporting documents in addition to the form, and there is no page limit to the submission

As a reminder, this product exclusion request process only applies to those goods subject to the ad valorem duty of 25 percent on products from China classified in the 818 subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) set out in Annex A of the June 20, 2018, Federal Register Notice. Note that Annex B to the notice contains the same list of tariff subheadings, with unofficial descriptions of the types of products covered in each subheading.

For more information on key dates and submission guidelines for China Section 301 Product Exclusion Requests, please click here for Crowell’s post discussing the specifics of the notice.

 

 

 

On July 11, 2018, the United States Trade Representative (USTR) published a notice in the Federal Register explaining the procedures and criteria related to requests for product exclusions from the additional tariffs placed on goods from China on July 6.

USTR must receive requests to exclude a particular product by October 9, 2018. Per the notice, a docket will be opened on regulations.gov for the receipt of exclusion requests in docket number USTR–2018–0025.

Responses to a request for exclusion of a particular product are due 14 days after the request is posted.

Any replies to responses to an exclusion request are due 7 days after the close of the 14 day response period.

On July 6, 2018, USTR issued an intial press release with a link to an advance copy of this Federal Register Notice.

For more details regarding this important announcement, please click here for Crowell’s July 8 post discussing the specifics of the notice.

 

 

 

 

 

 

In a notice published on June 20, 2018, the U.S. Trade Representative (USTR) announced the imposition of an additional ad valorem duty of 25 percent on products from China classified in the 818 subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) set out in Annex A of the notice in response to China’s alleged acts, policies, and practices related to technology transfer, intellectual property, and innovation included. Note that Annex B to the notice contains the same list of tariff subheadings, with unofficial descriptions of the types of products covered in each subheading.

The additional duties on these products took effect on July 6, 2018.

The June 20 notice also announced that the USTR would establish a process by which U.S. stakeholders may request that particular products classified within a covered tariff subheading be excluded from the additional duties.

On July 6, 2018, USTR issued a press release with a link to the soon-to-be published Federal Register Notice which explains the procedures and criteria related to requests for product exclusions. A docket for the receipt of exclusion requests will be established on regulations.gov.

The notice will be published in the Federal Register sometime during the week of July 9, 2018.

A key piece of information for importers is that “[a]ny exclusion will be effective starting from the July 6, 2018 effective date of the additional duties, and extending for one year after the publication of the exclusion determination in the Federal Register. In other words, an exclusion, if granted, will apply retroactively to the July 6 date of the imposition of the additional duties. USTR will periodically announce decisions on pending requests.”

Key Dates

  • Interested parties will have 90 days to file a request for a product exclusion; and
  • The request period will end on October 9, 2018.

Rationale for Requested Product Exclusion

Each request should explain the following factors:

  • Whether the particular product is available only from China. In addressing this factor, requesters should address specifically whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries;
  • Whether the imposition of additional duties on the particular product would cause severe economic harm to the requester or other U.S. interests; and
  • Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.

Process Timeline

  • Following public posting of a request on Regulations.gov, the public will have 14 days to comment on a certain product exclusion request; and
  • After the close of the 14 day response period, interested persons will have an additional 7 days to reply to any responses received in support of or opposition to the request.

Highlights

The notice includes information on:

  • How to identify products in the exclusion request;
  • Submission Instructions – to include the submission of business confidential information; and
  • Document Format Instructions.

 

 

Check back here for the latest developments on all the on-going trade actions.