Insights

What Asia-Based Steel and Aluminium Exporters Need to Know About Exclusions from US National Security Tariffs

On Monday March 19, 2018, The US Department of Commerce, Bureau of Industry and Security (“BIS”) published Interim Final Rules, which provide instructions for parties in the United States to submit requests for exclusions from the additional tariffs implemented on 8 March 2018 by Presidential Proclamation.  These so-called interim final rules take immediate effect but are still subject to the ordinary notice and comment procedures under United States Law, which we discuss a bit more below.  Whilst exclusion requests can only be submitted by affected parties in the United States, we would encourage our Asia-based clients to work with their customers or affiliates in the United States in order to develop a strategy for possible exclusion requests for specific products.

Comments on the Exclusion Procedures

In his proclamations, President Trump authorised the Secretary of Commerce to grant such exclusions from these tariffs upon a request by affected parties in the United States where the steel or aluminium articles are determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality or based upon specific national security considerations.  Further to this authorisation, Commerce has issued these Interim Final Rules, about which we note the following:

  • Exclusion petitions may only be submitted by “individuals or organizations using [steel or aluminium] articles . . . in business activities . . . in the United States”;
  • “Any individual or organization in the United States” may submit objections to such exclusion petitions;
  • Those exclusions that may ultimately be granted will generally be limited to the precise item that is the subject of the request and for the specific petitioner that submitted the request unless the ultimate grant specifically states otherwise. As such, interested parties should not expect to benefit from the successful requests of other petitioners;
  • Each request is limited to a single item to be identified at the 10-digit level of the Harmonised Tariff Schedule of the United States. Any objections to the request must be made within 30 days.  A further 60 days will be required in order to evaluate the requests and any objections.  The finals determination on the request will be expected to be issued within 90 days of the filing of the request.
  • Commerce will take into consideration the country of origin of the item for which exclusion has been requested as well as possible alternative origins in determining whether specific national security considerations justify the requested exclusion.
  • Granted exclusion will be effective 5 business days after the approval is published and will be valid for 1 year.

It is also important to note that repeated requests, refined requests, and multiple requests covering several products can be submitted

In addition to being informed on the procedures for submitting requests for exclusion, we want to remind you that interested parties may also submit comments to these Interim Final Rules, which must be submitted by 18 May 2018.

What should you do?
Comment Submissions

Those interested parties who wish to submit comments for consideration by the Department of Commerce must do so by 18 May 2018.  Should interested parties wish to submit comments, such comments can address any and all of the elements provided by the Interim Final Rules for requests, the criteria upon which the exclusions may be granted or denied as well as the country of origin and alternative countries of supply considerations identified above, which are not sufficiently specific so as to provide proper objective criteria for evaluating requests in our view.

These comments can be a useful opportunity to gain further clarity on criteria or evaluation considerations from Commerce as well as possibly even affecting some change in the final process.  Should you wish to discuss the submission of comments, please do not hesitate to contact us.

Preparation of Exclusion Requests

With respect to possible requests for exclusions, I  would recommend a review of the specific products at issue for your company and an analysis of the competitive landscape (i.e., alternative sources of supply) of the products in order to craft the most effective request possible.  I would be pleased to assist in preparing such requests.  Please reach out to me to discuss this further.

William Marshall
william.marshall@tiangandco.com
+852 28334977 / 64696776