This morning, the U.S. Department of Commerce Bureau of Industry and Security (BIS) issued an interim final rule establishing the process by which organizations may submit requests for exclusions from the 25% duties on steel and 10% duties on aluminum imposed by the President pursuant to Section 232, as well as the process for submitting objections to such requests.
According to the interim final rule, BIS will generally grant exclusions on a product-specific basis and such exclusions “will be limited to the individual or organization that submitted the exclusion request.” Companies must submit separate requests for each product, even if products are covered by the same 10-digit HTS subheading. The interim final rule does not elaborate on the exclusion criteria established under the Presidential Proclamations announcing the duties, which contemplated exclusions (i) for products not produced in the United States in sufficient and reasonably available quantity or of a satisfactory quality or (ii) based on national security considerations.
The interim final rule specifies that only those individuals or organizations “using steel in business activities (e.g., construction, manufacturing, or supplying steel or aluminum product to others) in the United States may submit exclusion requests,” though any U.S. individual or organization may oppose an exclusion request. While the interim final rule leaves some ambiguity as to the exact range of companies that may be able to request an exclusion, it is clear that only U.S. users of the products may make requests, effectively closing the process to foreign producers and exporters.
Three is no specific deadline for exclusion requests to be filed. Instead, the interim final rule provides that BIS will accept exclusion requests on a rolling basis. The anticipated timeline for determinations is as follows:
- Exclusion requests are filed electronically on Regulations.gov;
- Other parties have 30 days to file objections to these requests; and
- BIS approximates that it will take 60 days following the deadline for filing objections to make a determination, with the total processing time estimated at 90 days. (Note that the deadline for BIS's decision on exclusions is not a mandatory deadline.)
- Approved exclusions will be effective 5 business days following the publication of BIS's decision on the Regulations.gov website.
- Exclusions will generally be approved for one year, requiring renewed application for exclusions beyond that period.
The interim final rule states that all requests and comments regarding requests are subject to public disclosure and should therefore not include classified or business confidential information. It specifically notes that “[i]nformation that is subject to government imposed access and dissemination or other specific national security controls, e.g., classified information or information that has U.S. Government restrictions on dissemination to non-U.S. citizens or other categories of persons that would prohibit public disclosure of the information” may not be included any extension requests or objects filed on Regulations.gov. If applicants believe that certain business proprietary or confidential information would be helpful to BIS's consideration of an exclusion request, the rules indicate that the applicant should indicate so in the appropriate field.
The forms for filing requests for steel exclusions and objections to steel exclusion requests submitted can be found here: https://www.bis.doc.gov/index.php/232-steel. The forms for filing requests for aluminum exclusions and objections to aluminum exclusion requests submitted can be found here: https://www.bis.doc.gov/index.php/232-aluminum.
Although the rule will be immediately effective, BIS will accept comments on this interim rule filed within 60 days of publication of the notice announcing the rule, or by May 18, 2018. Companies desiring further clarity regarding the process and requirements for exclusions should consider submitting comments prior to this deadline.
As we have previously noted, the Presidential Proclamations imposing the tariffs on certain steel and aluminum products also invite discussion of additional country-wide exclusions. Negotiations and other parallel diplomatic efforts are currently being undertaken by multiple countries to secure such exclusions. For example, European Commissioner for Trade Cecilia Malmström is meeting with U.S. Commerce Department Secretary Ross this week to discuss a potential exclusion for products imported from the European Union.
Secretary Ross is scheduled to appear before the House Ways and Means Committee on Thursday, March 22 to discuss the Section 232 tariffs. We anticipate that the exclusion process and some of the questions it raises for companies, the business community, and U.S. trade policy in general will be raised during this hearing.
We anticipate a wide range of companies will apply for exemptions in the coming weeks and months. WilmerHale continues to assist clients in monitoring and participating in this process. Interested companies should contact us to discuss the variety of services we can provide related to these tariffs.