In a notice to be published in the Federal Register on December 14, 2020, the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce (DOC) announced a new interim final rule amending the exclusion process with respect to steel and aluminum mill products covered by additional duties under Section 232 of the Trade Expansion Act of 1962, as amended (“Section 232”).  Unless excluded, steel and aluminum products covered by this action are, respectively, subject to an additional tariff of 25% and 10% ad valorem.

The action reflects an acknowledgment of existing inefficiencies in the current exclusion process and makes three notable changes.

First, the new rule addresses the need to create a more efficient method for approving exclusions where objections have not been received in the past for certain steel or aluminum articles.  Specifically, the new rule establishes General Approved Exclusions (GAEs) that may be used by any importing entity (and which do not include quantity limits but are not retroactive in effect).  These determinations are made by DOC (in consultation with other agencies) based on its review of the universe of exclusion requests that are filed.  There is no regulatory mechanism for public requests for GAEs.  The new rule establishes an initial 108 GAEs for steel articles under and 15 GAEs for aluminum articles (all of which can be accessed at: https://public-inspection.federalregister.gov/2020-27110.pdf?utm_campaign=pi%20subscription%20mailing%20list&utm_source=federalregister.gov&utm_medium=email).  New GAEs may be established in the future.

Second, the new rule addresses a trend whereby exclusion requesters may have requested more volume than they have needed for their own business purposes compared to past usage. This issue is addressed by adding a new certification requirement along with a reminder of the consequences that may result from such false statements.

Third, the term “immediately” in the context of an objector’s ability to supply is being harmonized for U.S. objectors and foreign suppliers.  Specifically, immediate delivery is redefined from a flat eight weeks to either within eight weeks, or if after eight weeks, produced and delivered within a time frame that is equal to or earlier than that needed by the requester as demonstrated by the time required to obtain the product from the requester’s foreign supplier.

Other notable areas touched on in the new rulemaking include:

• A list of common reasons for rejection of exclusion requests.
• Enhancements in the area of submitting Confidential Business Information.
• Clarification of what constitutes a single product.
• Modification of certain technical aspects associated with submitting exclusion requests.

Other areas for potential changes in the Section 232 exclusion process are still under consideration by BIS and will be announced in one or more future rulemaking notices.

Should you have any questions or if we can be of assistance in helping your company prepare and file Section 232 exclusion requests for covered products, please do not hesitate to contact us.