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CSMS #40564257 - GUIDANCE: Section 301 $ 200B-Tranche 3 Third Round of Product Exclusions from China
U.S. Customs and Border Protection sent this bulletin at 11/08/2019 12:44 PM EST
Cargo Systems Messaging Service
CSMS # 40564257 - GUIDANCE: Section 301 $ 200B-Tranche 3 Third Round of Product Exclusions from China
BACKGROUND
On October 28, 2019, the U.S. Trade Representative (USTR) published Federal Register (FR) Notice 84 FR 57803 announcing the decision to grant the third round of certain exclusion requests from the 10 percent duty, and later amended to 25 percent duty, assessed under the Section 301 investigation related to goods from China ($ 200B Action - Tranche 3).
These product exclusions relate to the imposed additional duties announced in 83 FR 47974 on Chinese goods with an annual trade value of approximately $ 200 billion as part of the action in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The product exclusions announced in this notice will retroactively apply as of the September 24, 2018 effective date of the $ 200 billion action (Tranche 3), and will extend through August 7, 2020.
The exclusions are available for any product that meets the description as set out in Annex A to Federal Register Notice 84 FR 57803 , regardless of whether the importer filed an exclusion request. Further, the scope of each exclusion is governed by the scope of the Harmonized Tariff Schedule of the United States (HTSUS) 10-digit headings and product descriptions in the Annex; not by the product descriptions set out in any particular request for exclusion.
The functionality for the acceptance of the third round of products of China excluded from Section 301 duties will be available in the Automated Commercial Environment (ACE) as of 12 pm (Noon) Eastern Standard Time, November 7, 2019.
GUIDANCE
Instructions for importers, brokers and filers on submitting entries to CBP containing products granted exclusions by the USTR from the Section 301 measures as set out in 84 FR 57803 are as follow:
In addition to reporting the regular Chapters 29, 32, 37, 39, 40, 48, 51, 54, 56, 58, 59, 60, 68, 70, 73, 74, 75, 76, 82, 83, 84, 85, 87, 90, and 94 classifications of the HTSUS for the imported merchandise, importers shall report the HTSUS classification 9903.88.33 (Articles the product of China, as provided for in U.S. note 20(II) to this subchapter, each covered by an exclusion granted by the U.S. Trade Representative) for imported merchandise subject to the exclusion.
Importers shall not submit the corresponding Chapter 99 HTS number for the Section 301 duties when HTS 9903.88.33 is submitted.
ADDITIONAL GUIDANCE FOR APPLYING SEC 301 DUTY TO SETS (Annex B)
Annex B to 84 FR 49591 published September 20, 2019 identifies specific HTS numbers described as General Rules of Interpretation (GRI) 1 sets provision. Part A applies to those sets in the Tranche 3 (9903.88.03 or 9903.88.09) list and Part B applies to those sets in the Tranche 4 (9903.88.15) list. The intent is to apply section 301 duties only once on products of a set provision.
The reference to “sets” in 84 FR 49591 pertains to so-called “GRI 1 sets”, which are provisions in the HTSUS that identify a specific type of “set” (e.g. tool sets of heading 8206). The General Column 1 duty rate of those “sets” is typically the highest duty rate of all of the individual components that make up the set (i.e. does the “hand saw” of subheading 8202.10 have a higher or lower duty rate than the “band saw” of subheading 8202.20?). Previously, if a component of a set was on its own subject to the China 301 remedy by virtue of being included, for example, under “List 1”, then that component would have the highest duty rate, and therefore subject to entire “set” to the section 301 duties.
However, when the entire “set” provision (e.g. heading 8206) was included in a subsequent “List” of provisions subjected to the increased duties, that resulted in a cumulative imposition of the section 301 duties (i.e. the duty rate from the aforementioned component subjected to the China 301 remedy under “List 1” plus the increased duty imposed on the overall set by virtue of its inclusion in the subsequent “List”). The effect of 84 FR 49591 is to stop this cumulative imposition of the section 301 duties such that they apply only once to products imported under the set provisions designated in the notice.
If the component(s) is not subject to section 301 duties then the HTS# associated with the set will have the applicable duty rate applied as per the procedures outlined with the respective Tranche.
If the set and the component(s) are subject to Section 301 duties, use the guidance below. Section 301 duties are to be applied on the component with the highest duty rate.
If the component HTS# is covered under Tranche 1 (9903.88.01), then transmit 9903.88.21. (Only the Tranche 1 duty rate will apply to the component and the set will not be charged the Tranche 3 duty rate.)
If the component HTS# is covered under Tranche 2 (9903.88.02), then transmit 9903.88.22. (Only the Tranche 2 duty rate will apply to the component and the set will not be charged the Tranche 3 duty rate.)
If the component HTS# is covered under Tranche 3 (9903.88.03 or 9903.88.09), then transmit 9903.88.23. (Only the Tranche 3 duty rate will apply to the component and the set will not be charged the Tranche 3 duty rate.)
If the component HTS# is covered under Tranche 4 (9903.88.04), then transmit 9903.88.24. (Only the Tranche 4 duty rate will apply to the component and the set will not be charged the Tranche 3 duty rate.)
If the component HTS# is covered under Tranche 1 (9903.88.01), then transmit 9903.88.25. (Only the Tranche 1 duty rate will apply to the component and the set will not be charged the Tranche 4 duty rate.)
If the component HTS# is covered under Tranche 2 (9903.88.02), then transmit 9903.88.26. (Only the Tranche 2 duty rate will apply to the component and the set will not be charged the Tranche 4 duty rate.)
If the component HTS# is covered under Tranche 3 (9903.88.03 or 9903.88.09), then transmit 9903.88.27. (Only the Tranche 3 duty rate will apply to the component and the set will not be charged the Tranche 4 duty rate.)
If the component HTS# is covered under Tranche 4 (9903.88.04), then transmit 9903.88.28. (Only the Tranche 4 duty rate will apply to the component and the set will not be charged the Tranche 4 duty rate.)
NOTE:
9903.88.21, 9903.88.22, 9903.88.23 and 9903.88.24 are valid as of the effective date for Tranche 3, September 24, 2018.
9903.88.25, 9903.88.26, 9903.88.27 and 9903.88.28 are valid as of the effective date for Tranche 4, September 1, 2019.
ADDITIONAL INFORMATION
Duty exclusions granted by the USTR are retroactive for imports on or after the initial effective date of September 24, 2018. To request a refund of Section 301 duties paid on previous imports of products granted duty exclusions by the USTR, importers may file a Post Summary Correction (PSC) if within the PSC filing timeframe. If the entry is beyond the PSC filing timeframe, importers may protest the liquidation.
Reminder: When importers, brokers, and/or filers are submitting an entry summary in which a heading or subheading in Chapter 99 is claimed on imported merchandise, see CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTS when 98 or 99 HTS are Required).
Imports which have been granted a product exclusion from the Section 301 measures, and which are not subject to the Section 301 duties, are not covered by the Foreign Trade Zone (FTZ) provisions of the Section 301 Federal Register notices, but instead are subject to the FTZ provisions in 19 CFR part 146.
For ease of reference, Summaries of Section 301 Duties and Product Exclusion Notifications are provided below:
For more information related to the third round of products of China excluded from Section 301 duties, please refer to 84 FR 57803 , issued October 28, 2019. For more information on applying Section 301 duty to sets, please refer to 84 FR 49591 published September 20, 2019.
Questions from the importing community concerning ACE entry rejections involving product exclusions should be referred to their CBP Client Representative. Questions related to Section 301 entry-filing requirements should be emailed to Traderemedy@cbp.dhs.gov.
Related Messages: CSMS #38840764, #19-000332, #19-000244, #19-000212, #19-000155, #19-000052, #38840764, #39169565, #39268267, #39473933, #39587690
Section 301 China Tables.pdf
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