USTR Announces New Round of
Section 301 Duty Exclusions

September 19, 2019

On September 17, 2019, the Office of the U.S. Trade Representative (USTR) released three notices granting additional exclusion requests to the Section 301 duties levied on goods from China. The notice affects goods on Lists 1, 2 and 3 specified in the Annex attached to each notice. A link to each USTR notice follows:

For List 1, the September 17th notice follows exclusions granted in December 2018, March 2019, April 2019, May 2019, June 2019, and July 2019. The product exclusions announced in this notice will apply as of the July 6, 2018 effective date of the $34 billion action and will extend for one year after the publication of this notice. (Each notice will have its own expiration date covering the goods identified in the specific notice.)

For List 2, the September 17th notice follows the July 2019 initial grant exclusion requests. See 84 FR 37381. The product exclusions announced in this notice will apply as of August 23, 2018 and will extend for one year after the publication of this notice.

For List 3, the September 17th notice follows the August 2019 initial grant of exclusion requests. See 84 FR 38717. This set of exclusions is set to expire on August 7, 2020, one year following the publication of the exclusion determination in the Federal Register.

The USTR regularly updates the status of each pending request and posts the status within the webpages for the respective tariff action they apply to: You can see these at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions.

Expect to see U.S. Customs and Border Protection issue instructions on entry guidance and implementation.

Additional information on the USTR actions on section 301 duties for China can be accessed at: https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions.

Amendment to the List 3 Exclusion Process

The June 24 notice announced that the exclusions granted for the $200 billion trade action would be effective starting from September 24, 2018 and extend for one year after the publication of the exclusion determination in the Federal Register. This policy, however, would have resulted in disparities in the effective periods between exclusions granted early in the exclusion process and those granted later. Accordingly, the USTR is amending the exclusion process so as to adopt a uniform expiration date for exclusions granted for items on List 3. In particular, all exclusions grant for List (the $200 billion action) will be effective from September 24, 2018, to August 7, 2020.

The USTR will continue to issue decisions on pending requests on a periodic basis.

How to Claim your Exclusion

The exclusions are available for any product that meets the description as set out in the Annex to each Federal Register Notice, regardless of whether the importer filed an exclusion request. As such, every importer should be reviewing the list of granted exclusions regardless of whether they filed a request or not. Further, the scope of each exclusion is governed by the scope of the Harmonized Tariff Schedule of the United States (HTSUS) 10-digit headings and product descriptions in the Annex; not by the product descriptions set out in any particular request for exclusion.

Instructions on submitting entries to CBP containing products granted exclusions by the USTR from the Section 301 measures in 84 FR 38717 are as follows:

In addition to reporting the regular Chapters 39, 54, 56, 73, 87 and 89 classifications of the HTSUS for the imported merchandise, importers shall report the HTSUS classification 9903.88.13 (Articles the product of China, as provided for in U.S. note 20(p) to this subchapter, each covered by an exclusion granted by the U.S. Trade Representative) for imported merchandise subject to the exclusion.

Importers shall not submit the corresponding Chapter 99 HTS number for the Section 301 duties when HTS 9903.88.13 is submitted.

To request a refund of Section 301 duties paid on previous imports of duty-excluded products granted by the USTR, importers may file a Post Summary Correction (PSC) if within the PSC filing timeframe. If the entry is beyond the PSC filing timeframe, importers may protest the liquidation.

Entries Covered by Pending Product Exclusion Requests

In CSMS #19-000260 CBP explained that if you have a pending product exclusion request with USTR or are importing a product that is covered by a pending exclusion request, and you are concerned that a corresponding entry may liquidate before USTR renders a decision on the exclusion request, you can:

  1. request an extension of the liquidation deadline, and file a PSC no later than 15 days before the extended date of liquidation; and/or
  2. file a protest within the 180-day period following liquidation. When filing a protest, the protestant should identify the pending product exclusion decision from USTR as a basis for the protest. Upon receiving USTR’s decision on the product exclusion, the protestant should submit the exclusion information to CBP as additional information pursuant to 19 C.F.R. 174.28.

If a protest is filed, CBP will postpone a determination on protests that include a claim identifying a pending product exclusion. Once USTR completes the exclusion processing, CBP will process these protests pursuant to USTR’s exclusion determination. That is, CBP will refrain from denying or granting a party’s protest before the importer receives a final determination from USTR regarding its product exclusion request.

If have questions about filing an exclusion request, seeking a refund of past duties paid under Sec. 301, and/or discussing Sec. 301 duty avoidance strategies, such as use of Country of Origin transference or use of “First Sale” valuation, contact George R. Tuttle, III at geo@tuttlelaw.com or at 415-986-8780.

 

George R. Tuttle, III is an attorney with the Law Offices of George R. Tuttle in the San Francisco Bay Area.

The information in this article is general in nature and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.

Copyright © 2019 by Tuttle Law Offices. 
All rights reserved. 

Information has been obtained from sources believed to be reliable.  However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.

 

 

 

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