Industry News

Commerce Creates General 232 Exclusions

Dec. 13, 2020
By: Lawrence M. Friedman

On December 14, 2020, Department of Commerce will publish an interim final rule making improvements to the Section 232 exclusion process. Citing Section 232 and a goal of ensuring national security through strong domestic steel and aluminum production, President Trump imposed duties on certain steel and aluminum products imported into the United States. Following the Presidential Proclamations, the Commerce Department created a process by which interested parties can request an exclusion for imports. To date, those exclusions have only been applicable to the party that made the request.

In the Federal Register Notice, the Bureau of Industry and Security will announce several changes to the exclusion process. Most important, the BIS is granting several General Approved Exclusions (“GAEs”) that may be used by any importer of the covered merchandise. GAEs will not include quantity limitations and will remain in place until revoked or modified.

In addition to the creation of GAEs, BIS is also publishing a list of GAEs it will be implementing. The list of steel articles covered by GAEs will be Supplement No. 2 to Part 705 of the regulations and is included at the end of the Federal Register Notice. Aluminum GAEs are identified in Supplement 3. Each of the GAEs identifies articles at the 10-digit HTSUS level or more narrowly defined product description. The GAEs do not provide any retroactive relief. They become effective 15 days after publication in the Federal Register.

If widely applied, the GAE process will bring Section 232 exclusions and compliance more closely aligned with the uniformly applicable Section 301 process adopted by the USTR.

Other changes include a new certification requirement for requesters and a change to the standard for when an objecting producer can “immediately” delivery steel or aluminum to a requester. Under the current rule, objectors must be able to deliver within eight weeks while foreign suppliers are not held to that standard.

The requester certification is intended to address the concern that requesters are seeking exclusions for more volume than needed. The certification of needed volume is highlighted with a reminder than making false statements to the U.S. Government is prohibited.

Regarding delivery times, the concern being addressed is that foreign suppliers generally receive exclusions for a year and will likely not have to deliver all the material at one time. This allows them greater flexibility that the eight-week period required of objectors. Under Paragraph (c)(6)(i), the standard for when a product is not produced in the U.S. in sufficient quantities and reasonably available will mean:

that a product (whether it is currently being produced in the United States, or could be produced in the United States) can be delivered by a U.S. producer ‘‘within eight weeks’’, or, if that is not possible, by a date earlier than the time required for the requester to obtain the entire quantity of the product from the requester’s foreign supplier.

If you have any questions about the changes to Section 232 exclusions, please contact any Barnes/Richardson attorney.