BIS rule to refine Section 232 exclusion process

The Bureau of Industry and Security is expected to establish a formal rebuttal process as part of the revisions to be delivered Tuesday.

BIS rule to refine Section 232 exclusion process

The Bureau of Industry and Security is expected to establish a formal rebuttal process as part of the revisions to be delivered Tuesday.

BIS rule to refine Section 232 exclusion process

The Bureau of Industry and Security is expected to establish a formal rebuttal process as part of the revisions to be delivered Tuesday.

 
The Bureau of Industry and Security (BIS) is set to publish an interim final rule (IFR) on Tuesday making several changes to the product exclusion process for Section 232 remedies on steel and aluminum, including a requirement for objectors to exclusion requests to be more specific about timelines and disclosing any potential hurdles that may limit their ability to start producing needed steel or aluminum.
    “As described above, the exclusion request, objection, rebuttal and surrebuttal process has the potential to be adversarial in nature, so the Department believes it important to establish clear criteria to allow all parties to better understand the facts at hand,” the IFR states.
    Upcoming changes to the exclusion process also include a new rebuttal and surrebuttal process.
    Rebuttals to objections will be allowed only from individuals or organizations that have submitted an exclusion request, BIS said.
    “The most effective rebuttals will be those that aim to correct factual errors or misunderstandings in the objection(s),” the IFR states. “A good rebuttal should assist the parties involved to come to a common understanding of the facts at hand. Coming to a common understanding regarding the facts of a particular exclusion or objection will better inform the Department’s review process.”
   Rebuttal periods will last for seven days, and the Commerce Department will open rebuttal periods once it has posted all the complete objections received on an exclusion request.
    BIS is also amending the process to allow for exclusions from Section 232 quotas. So far in the process, exclusions have been available only from tariffs.
The exclusion form has been revised to include an additional field for quota exclusion requests, BIS said.
    President Donald Trump on Aug. 29 signed a proclamation allowing for Commerce to provide targeted relief from Section 232 import quotas on steel and aluminum.
    Commerce investigations under Section 232 of the Trade Expansion Act of 1962 resulted in duties on steel and aluminum imports applicable to most countries, but the Trump administration also negotiated absolute quotas with South Korea, Argentina and Brazil for steel imports and with Argentina for aluminum imports. Imports subject to these quotas are not subject to duties.
    Senate Appropriations Commerce, Justice, and Science Subcommittee members criticized the BIS exclusion process for Section 232 trade remedies on steel and aluminum during a trade oversight hearing on Thursday.
   The subcommittee understands that as of Aug. 20, the Commerce Department had received about 15,000 industry objections to approximately 9,600 exclusion requests filed in response to Section 232 steel and aluminum tariffs and that decisions had been made only for about 4 percent of those exclusion requests, said subcommittee Chairman Jerry Moran, R-Kan.
    Moran went on to note that 95 percent of the 376 decided exclusion requests have been denials and said the existing exclusion/objection process seems biased in favor of objectors.
    Moran’s numbers “differ slightly from mine, which I think is a timing [issue,] but I think the general trends are not wrong,” BIS Assistant Secretary for Export Administration Richard Ashooh said. “Of the posted decisions that we have, which is about 4,000 posted, we don’t like the processing time. We allowed ourselves 90 days. We’re within that, but that’s still a long time.”
    Ashooh added that BIS submitted its IFR to be published in the Federal Register to set forth a more adequate rebuttal process for entities seeking to counter objections to their exclusion requests.
    The rule should bring more clarity to the rebuttal process, he said.
   The Section 232 product exclusion process — which also involves work by U.S. Customs and Border Protection — is “very cumbersome,” and BIS is looking for other improvements to the process, which would likely include “some sort” of information technology “solution,” Ashooh said.
    In total, BIS is actively processing 25,045 steel exclusion cases and has finished processing 10,380 steel exclusion applications, including decisions and rejected improper submissions, Ashooh said in written testimony for the hearing.
    Moreover, BIS is actively processing 3,610 aluminum exclusion cases and has finished processing 784 aluminum exclusion applications, including decisions and rejected improper submissions, Ashooh wrote.
    Subcommittee ranking member Jeanne Shaheen, D-N.H., said the Section 232 steel and aluminum remedy exclusion process is “burdensome and opaque,” creating “a mountain of red tape, forcing small businesses to spend precious time and resources to rework their operations.”
    One of Congress’ most vocal opponents on steel and aluminum tariffs, Sen. Lamar Alexander, R-Tenn., asked Ashooh whether BIS took into account the position of U.S. aluminum producer Alcoa, which Alexander noted produces half of U.S.-produced aluminum and also opposes the 10 percent Section 232 tariff.
   Alexander called the tariffs an “abuse of authority,” noting that they don’t apply only to defense articles but also to consumer goods such as aluminum foil and apply to Canada, a U.S. ally that produces much of the steel consumed in this country.
    Ashooh noted that the Commerce-led Section 232 aluminum investigation focused mainly on global overcapacity and that tariffs are part of a Trump administration effort to increase the aluminum industry’s utilization of domestic capacity to 80 percent from its current 57 percent utilization.
Preparations include training exercises, deploying additional CBP personnel and partnering with the U.S. military to harden our ports of entry and the border area between those legal crossings into the U.S.
The Port of Los Angeles processed 952,554 TEUs in October, a 27.2 percent increase year-over-year and the most cargo handled in a single month in the port’s 111-year history.
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