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03.23.2018 Legal News

Commerce Department Announces Procedures for Companies to Request Exclusions From Recent Steel and Aluminum Tariffs

On March 19, 2018 the Commerce Department (“Commerce”) published procedures for private companies to seek exclusions from the recent steel and aluminum tariffs imposed by President Trump under the Administration’s national security investigation under §232 of the Trade Expansion Act.[1]  Under these procedures, companies may request to be exempt from the new tariffs if they meet the standards for exclusion set forth in the release.  The procedures also permit private parties to submit objections to exclusion requests submitted by other parties.  The procedures were set out in an Interim Final Rule published in the Federal Register (the “Rule”) that amends Commerce’s National Security Industrial Base Regulations.  A summary of the new procedures as set forth in the Rule is as follows:

  • Types of Submissions. There are three types of submissions contemplated under the Rule: (i) requests for tariff exclusions; (ii) objections to requests for tariff exclusions filed by other parties; and (iii) comments on the Rule.
  • Who Can Submit Exclusion Requests:  Individuals or organizations using steel articles identified in Presidential Proclamation 9705 or aluminum articles identified in Proclamation 9704 in business activities in the U.S. (e.g., construction, manufacturing, or supplying steel/aluminum product to users) may submit exclusion requests.
  • Scope of Exclusion Requests:  Approved exclusions will be made on a product by product basis and will be limited to the individual or organization that submitted the specific exclusion request, unless Commerce approves a broader application of the exclusion request to apply to additional importers.
  • Standard For Review:  An exclusion will be granted if the Secretary of Commerce (the “Secretary”) determines that the steel or aluminum article for which the exclusion is requested is not produced in the United States in a sufficient and reasonably available amount, is not produced in the United States in a satisfactory quality, or should be excluded based upon specific national security considerations.  There is no guidance in the Rule regarding the standard for review or the definition of “national security considerations,” however we expect that Commerce will consider issues addressed in the two reports released by the Secretary under the Sec. 232 investigation.
  • Procedure For Review:   To submit a request for exclusion, parties are required to file an electronic submission on forms provided by Commerce.  The forms solicit a variety of detailed information including the business activities in the U.S. in which the requester is engaged, the identity of the product (including detailed specifications) and support for the basis upon which the exclusion is sought based upon the standard for review. 
  • Review Period.  The review period identified in the Rule is 90 days (including time to adjudicate objections submitted for specific exclusion requests). 
  • Time Limit For Submissions.  The Rule provides that requests for exclusions may be submitted at any time.
  • Public Information.  Exclusion requests, objections and comments to the Rule will be made available for public inspection.  However the Rule provides that parties that submit proprietary or business confidential information should so indicate in the appropriate field of the relevant Form.
  • Objections To Exclusion Requests.  Parties may also file objections to exclusion requests that are filed by other parties:
    • Any individual or organization in the United States may file objections to steel or aluminum exclusion requests – however Commerce will only consider information directly related to the submitted exclusion request that is the subject of the objection.
    • Objections must be submitted no later than 30 days after the related exclusion request is posted.
    • Objectors should submit information that the objector believes would be relevant for the Secretary to make the determination regarding excluding the relevant product, including meeting the standard of review set forth above.
  • Requests For Products Addressed In Previous Requests. Individuals or organizations that wish to submit an exclusion request for a steel or aluminum product already approved for exclusion based upon another party’s request may submit an exclusion request.  (Such follow-on requesters are not required to reference a previously approved exclusion, but Commerce may take that into account when reviewing a subsequent exclusion request.)  In addition, individuals and organizations will not be precluded from submitting a request for exclusion of a product where a previous exclusion request for the same product had been denied or is no longer valid.  (The later requester should, however, submit new or different information in an attempt to meet the criteria for approving an exclusion request for that product.)
  • Interim Final Rule.  The Rule is an interim final rule – it is effective as of March 19, 2018 but may be amended by Commerce based upon comments received by Commerce by May 18, 2018.
  • Separate From Country Requests.  These requests are separate from requests that may be submitted by foreign countries which involve exemptions for the entire foreign country.

The above procedures are subject to possible amendment as Commerce begins implementation of the exclusion reviews or if the Rule is amended based upon comments from the public.

Note:  This article contains general, condensed summaries of actual legal matters, statutes and opinions for information purposes.  It is not intended and should not be construed as legal advice.

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[1] On March 8, 2018 President Trump issued Proclamation 9705 in which he imposed a 25% ad valorem tariff on certain steel articles imported from all countries except Canada and Mexico, and Proclamation 9704 in which he imposed a 10 % ad valorem tariff on certain aluminum articles imported from all countries except Canada and Mexico, so that the imports of such items will no longer impair the U.S. national security.  The Proclamations were issued following an investigation under §232 of the Trade Expansion Act of 1962, as amended, and two reports issued by the Secretary of Commerce under such investigation.