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Client Alert – USTR Announces Second Round of Granted Section 301 Exclusion Requests

By Steven A. Harris, Esq. and Megan E. Finkelstein

Effective July 6, 2018, the U.S. Trade Representative (“USTR”) imposed additional duties of 25% on the so-called List 1 products from China pursuant to Section 301 of the Trade Act of 1974. An exclusion request process for List 1 products was established with a submission deadline of October 9, 2018. On March 25, 2019, the USTR granted the second set of exclusion requests, as specified in the annex to the Federal Register notice linked here. The first round of exclusion request relief was issued on December 28, 2019, as specified in the annex to the Federal Register notice linked here.

Following in the same format as the first USTR approvals, the exclusions are established in two different formats: (1) as an exclusion from the Section 301 duties of an entire 10-digit HTSUS subheading (e.g. 8430.31.0040, coal or rock cutters and tunneling machines, self-propelled rock breaking machines), or (2) as an exclusion from the Section 301 duties of a specifically described product within a specified HTSUS classification (e.g. check valves of plastic (described in statistical reporting number 8481.30.9000 (which provides for “check valves, other”))). The exclusions are available to any importer, regardless of whether the importer filed an exclusion request, for any product that falls within the excluded 10-digit HTSUS subheadings or the specific product descriptions. This is in contrast to the exclusion request process for the additional duties on steel and aluminum imposed pursuant to Section 232 of the Trade Expansion Act of 1962 in which a granted exclusion is applicable solely to the requester. For this reason, if your imported products have been subjected to Section 301 additional duties or your petition for relief has been denied, it may be worthwhile to review the HTSUS subheadings and specific products that have been excluded to see if any of your imported products fall within the granted exclusions. If so, you may seek refunds of the Section 301 duties that you have paid since July 6, 2018, and you may utilize these exclusions for new entries through March 25, 2020 for this second announced round of exclusions. Exclusions for the first annex will expire on December 28, 2019 unless further instruction is issued. In order to avoid potential U.S. Customs & Border Protection (“CBP”) compliance issues when relying on a granted exclusion request for which you were not the requester, we recommend a careful review of your product and its HTSUS classification in the context of the granted exclusion request parameters and your historical importing practices prior to claiming Section 301 duty relief.

Also note that additional Section 301 exclusion requests are expected to be approved in the coming weeks and months and that you may want to monitor the USTR website and/or Federal Register so that you may take advantage of any additional applicable exclusions. An exclusion request procedure for List 3 continues to be rumored and we will continue to monitor this development.

If you have any questions about whether your products fall within the granted exclusions, how to obtain refunds and utilize the exclusions for future entries, assistance with historical review of products which fall within the granted exclusions to ensure CBP compliance and proper refunds, or the Section 301 duties in general, we stand ready to assist you.

If you have any questions about any of the above information, or wish to discuss a particular matter, please feel free to speak with any member of our International Business Practice by calling us at 412-297-4900 or visiting https://www.cohenlaw.com/practices/international-business. To receive future client alerts, please send an e-mail to bulletins@cohenlaw.com.

This information is accurate at the time of distribution and is subject to changes made by the administration. We will provide updates as they occur.

Copyright © 2019 by Cohen & Grigsby, P.C.

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