On July 6, 2018, the U.S. Trade Representative (USTR) imposed additional duties on certain goods of China as a part of the Section 301 investigation of China’s acts, policies and practices related to technology transfer, intellectual property and innovation. As a part of the determination, USTR established a product exclusion process for goods subject to the 25% duty assessed under the Section 301 investigation. All of the product exclusions issued to date are retroactive to the July 6, 2018 commencement of the additional duties under Section 301 and extend for one year after the publication of the exclusion notice in the Federal Register. (noted in the chart below.)
Per the USTR Federal Register notices, the product exclusions are available for any product that meets the description in the annex to Federal Register notice, regardless of whether the importer filed an exclusion request. Further, the scope of each exclusion is governed by the scope of the 10-digit headingsandproduct descriptions in the annex, and not by the product descriptions set out in any particular request for exclusion.
For List 1, of the China Section 301 increased tariffs, the USTR has published notices in the Federal Register covering six rounds of exclusions. Within each FRN, the USTR provides a scope of the excluded products, referenced in the annex section of each publication. Below are the publications covering products which were granted exclusions.
**The sixth round of exclusions was published on 7/9/2019; however, Customs and Border Protection (CBP) must activate the specified Ch. 99 HTS for use by the trade. HTS 9903.88.11 was made available for use on 7/11/2019.
Customs requires the Importer of Record to provide reasonable care in valuation, classification and merchandise description, when offering products for import into the U.S. commerce. With the complexity of the scope of the exclusion, EMO Trans must also provide guidance and reasonable care when preparing and submitting information to Customs. To provide the highest level of compliance to our customers, EMO Trans requests documentation be provided to substantiate the claim of the exemption is appropriate per the scope rulings product description and classification requirements.
Importers with Entries Covered by Granted Product Exclusion Requests
Product exclusions granted by USTR so far are retroactive to July 6, 2018, for unliquidated entries or entries that are liquidated but not final. Once a product exclusion is granted by USTR, an Importer of Record (IOR) may request an administrative refund by filing a Post Summary Correction (PSC) for unliquidated entries that are covered by the exclusion. If an entry is liquidated prior to the filling of a PSC, a party may file a protest.
PSC may be filed 300 days after release or 15 days prior to liquidation (whichever occurs first).
Protest may be filed up to 180 days after liquidation.
Entries Covered by Pending Product Exclusions Requests
As the IOR, if you have a pending product exclusion request with USTR, or are importing a product that is covered by such 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:
Request an extension of the liquidation deadline, and file a PSC no later than 15 days before the extended date of liquidation; and/or
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 making 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.
For additional questions or support please contact your local EMO Trans office, as EMO Trans has a network of Licensed Customs Brokerage specialists available to assist with accomplishing your compliance goals.
Corporate Customs Compliance Manager