BIS to Amend Section 232 Exclusion Process, Allowing Importer Responses to Domestic Industry Objections

The Bureau of Industry and Security is set make changes to the process for requesting exclusions from Section 232 tariffs and quotas on steel and aluminum products. The interim final rule creates procedures for rebutting objections to exclusion requests, clarifies the criteria BIS reviews when deciding whether to grant or deny requests, and provides for broader exclusion requests based on ranges or dimensions within the same Harmonized Tariff Schedule code.

The changes come in response to comments from industry on an earlier interim rule outlining the exclusion process issued March 19 (see 1805170043), as well as an unexpected surfeit of requests. “The number of submissions for exclusion requests and objections have far exceeded original expectations, and [BIS] is taking steps in this rule to improve the efficiency of adjudicating those requests,” it said. The new regulations have yet to be published as of Sept. 6, but BIS said they’ve been submitted to the Federal Register. The interim final rule will take immediate effect, but comments will be accepted until 60 days after it's published.

One change, intended to “improve the fairness of the process by allowing the individual or organization that submitted an exclusion request or an objection to have an opportunity to respond to information provided by the other party, leading to better and more informed decisions on exclusion requests,” BIS said. Previously, importers with requests denied due to objections had to resubmit their requests with arguments as to why they should nonetheless be approved (see 1807250009).

Now, BIS will allow for a rebuttal period for responses to objections, as well as a surrebuttal period for objectors to respond to rebuttals. After posting the last of any objections received, BIS will announce the opening of the rebuttal period on its website, with no direct notice given to the requestor of the exclusion. That requestor will then have seven days to file a rebuttal under the procedures outlined in a new supplement included in the interim final rule.

Exclusions that have already been posted but not fully adjudicated will be “grandfathered” to allow for the filing of rebuttals. Requests will only be reopened if any objections were received, the 30-day period for reviewing objections has closed, and BIS has not yet posed a final determination on the exclusion request, the interim rule said.

Elsewhere, BIS is also making changes to allow for more flexibility in exclusion requests. New provisions specify that “exclusion request forms allow for minimum and maximum dimensions,” and “that ranges are acceptable if the manufacturing process permits small tolerances.” The range “must be within the minimum and maximum range that is specified in the tariff provision and applicable legal notes for the provision,” BIS said.

The interim final rule also provides more specific information on the criteria under which BIS grants or denies exclusion requests, including definitions and illustrative examples on what it means to be “not produced in the U.S. in a sufficient and reasonably available amount” or “satisfactory quality.” Additionally, under the amended regulations, only individuals and organizations that use steel or aluminum products in their business activities may file objections to requests for exclusions from the respective Section 232 tariffs.

The new regulations also codify an existing “streamlined review” process for exclusion requests that don’t receive any objections. Under the expedited procedures, after the 30-day comment period on an exclusion expires with no objections, BIS will work with CBP to ensure the requestor provided an accurate tariff schedule subheading and then immediately assess the request. If the request “satisfies the criteria and presents no national security concerns, BIS will expeditiously post a decision on regulations.gov granting the exclusion request,” it said.