Today the Commerce Department published proposed revisions to the Section 232 Steel and Aluminum Tariff exclusions process.
Specifically, the proposed rule makes four changes, which will impact both requestors and objectors. At a high level, Commerce is attempting to reduce the number of exclusion requests received and objected to, which may streamline the agency process but which may also result in further burdens on requestors and objectors.
These proposed changes include:
- General Approved Exclusions. Commerce proposes to change the criteria for General Approved Exclusions (GAEs) from specific statistical reporting numbers in the Harmonized Tariff Schedule of the United States (HTSUS) that have received no objections to HTSUS classification codes (or subproducts) with very low rates of successful objections. This proposal could broaden the number of GAEs. BIS estimates that this change could result in up to a twenty percent reduction in the total number of exclusion requests submitted in the 232 Exclusions Portal.
- Introduction of a General Denied Exclusion. Commerce proposes the introduction of a General Denied Exclusions (GDE) process that will implement a GDE if, among other things, the HTSUS classification code (or subproducts) have very high rates of successful, substantiated objections. BIS explains that the addition of the GDEs will enhance the efficiency of the Section 232 exclusions process by reducing the burden on objectors and requesters with respect to Section 232 exclusion requests that historically have had a very low likelihood of being approved.
- New Certification Requirements for Requestors. Commerce proposes to modify the existing requester certification language and introduce new certification requirements for exclusion requests. Under this modification, before filing an exclusion request, requestors also need to certify that they have first made reasonable efforts to source their product from the U.S., and then, if unsuccessful in sourcing from the U.S., that they have made reasonable efforts to source their product from a country with which the U.S. has arrived at a satisfactory alternative means to address the threat to the national security under Section 232. These countries include Argentina, Australia, Brazil, Canada, the European Union, Japan, Mexico, South Korea, and the United Kingdom. Requestors must further file evidence of sourcing attempts simultaneously with their request submission, and requests without such supporting documentation will be rejected.
- New Certification Requirements for Objectors. Commerce proposes to alter the certification language on the objection form and require the submission of evidence accompanying an objection submission. Specifically, objectors would certify their intent and ability to provide the requested product to the requestor if successful in their objection. Objectors must also file, simultaneously with their objection submission, supporting documentation that the objector has commercially sold the same product as that which is being requested within the last 12 months, or evidence that it has engaged in sales discussions with this requesting company or another company requesting the same product within the last 12 month.
Comments, whether in support or in opposition of the proposed revisions, are due by October 12, 2023, via regulations.gov, docket number BIS-2023-0021.
CLK is well placed to assist clients in assessing how these proposed regulatory changes impact their businesses. Please contact us if you have any questions about these proposed changes or wish to file comments.