The Department of Commerce’s Bureau of Industry and Security (BIS) has amended the exclusion request process for the tariffs on certain steel and aluminum products implemented under Section 232 of the Trade Expansion Act of 1962. On March 8, 2018, President Trump exercised his authority under Section 232 and imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports (with certain countries receiving exemptions). U.S. Customs and Border Protection (CBP) began collecting the tariffs on March 23, 2018.
BIS has acknowledged that the number of filings has far surpassed expectations – as of August 20, BIS had received more than 38,000 exclusion requests and more than 17,000 objections – amid growing concerns over the importance of a transparent, fair and efficient product exclusion and objection process. The amendments seek to address these concerns and will create a process for rebutting objections filed to exclusion requests. They also attempt to clarify the criteria BIS considers during the review process to grant or deny an exclusion request.
The interim rule containing these amendments is scheduled to be published September 11, 2018, at which time it will become effective. Any comments on these proposed modifications to the Section 232 exclusion request process will be due no later than 60 days after publication in the Federal Register by filing on the Federal eRulemaking portal (www.regulations.gov) on Docket No. BIS-2018-0016.
Addition of Rebuttal and Surrebuttal Procedures
Under the amended rules and procedures, the original party filing an exclusion request will now be able to respond to any filed objections:
- Rebuttals to Objections – Once implemented, BIS will allow for the party that originally submitted an exclusion request to rebut any filings that objected to the request. Rebuttals must address an objection to the exclusion request; if multiple objections were received on a particular exclusion, the original party may submit a rebuttal to each objector. BIS has indicated that “the most effective rebuttals will be those that aim to correct factual errors or misunderstandings in the objection(s).” While the full procedures for this process are not yet available, once an objection is posted on the Section 232 steel/aluminum dockets, the party who originally filed the exclusion request will have seven days to submit a rebuttal.
- Surrebuttals to any Rebuttals – Once implemented, BIS will allow for the party that filed an objection to an exclusion request to file a surrebuttal to any rebuttals filed by the party seeking the exclusion request. Any surrebuttals must be filed within seven days of the posting of any rebuttals.
BIS has indicated that exclusion requests that currently remain open and pending will be “grandfathered” into this expanded process and reopened to allow for rebuttals/surrebuttals. With these additional steps in the review process, BIS has stated that the full review period will now run approximately 106 days.
Streamlined Review of “No Objection” Requests
BIS has more clearly and formally stated that it will “expeditiously grant properly filed exclusion requests which meet the requisite criteria, receive no objections, and present no national security concerns.” The interim rule states that if an exclusion request’s 30-day comment period expires and no objections were submitted, BIS will work with CBP to ensure that the entity requesting the exclusion provided an accurate Harmonized Tariff Schedule (HTS) subheading. Once confirmed, BIS will then immediately assess the request for any national security concerns and, if none is identified, will expeditiously post a decision granting the exclusion request.
Clarification on Review Criteria
BIS reviews each exclusion request to determine whether an article described in an exclusion request meets any of these criteria: (i) the article is not produced in the United States in a sufficient and reasonably available amount, (ii) the article is not produced in the United States in a satisfactory quality, or (iii) for specific national security considerations. The interim rule further details the intended meaning of each criterion.