The New Miscellaneous Tariff Bill Process Set to Begin

On October 11, 2019 the U.S. International Trade Commission (ITC) began accepting Miscellaneous Tariff Bill (MTB) petitions for duty suspension or reduction. The American Manufacturing Competitiveness Act (AMCA) of 2016 created the current MTB process. Under the MTB process, U.S. importers are able to petition for duty-free or reduced-duty treatment of certain imported products by submitting a petition to the ITC.

A detailed timeline of the process can be found here. The new MTB process, as set out in the law, runs from October 2019 through the end of 2020. The dates and time frames below have been calculated from the start date announced by the U.S. ITC and the text of the legislation:

• October 11 – December 10, 2019: USITC MTB portal open for petition submission.
• December 10, 2019 – January 11, 2020: USITC compiles petitions.
• No later than January 11 – USITC issues Federal Register notice soliciting comments on product petitions.
• January 11 - Late February, 2020 (45 days): USITC accepts public comments through online portal.
• January 11 - Mid-April, 2020 (90 days): Commerce conducts its review of petitions, at the end of which it submits its report to the congressional committees and the USITC.
• January 11 - Mid-June, 2020 (150 days): USITC conducts its review of petitions, at end of which it submits its Preliminary Report to the congressional committees, taking into consideration the Commerce Report.
• Mid-June – mid-August, 2020 (60 days): USITC conducts re-review of individual petitions, based on information submitted by the congressional committees, at the end of which it submits its Final Report to the congressional committees.

A successful MTB petition will cover a “noncontroversial” or “noncompetitive” product. The guidelines defining those products are:

• No domestic producer objects to the import duty elimination or reduction for the product;
• The import duty elimination or reduction for the product is determined to be in the interest of U.S. “downstream” producers and consumers; and
• The import duty elimination or reduction for the product must not result in a loss to the U.S. Department of the Treasury of more than $500,000 in annual revenue.

The ITC determines whether the petition should move forward. ITC delivers its determinations directly to congressional committees, including but not limited to:

• A determination if domestic production of the product exists;
• A determination of whether a domestic producer objects to the petition;
• Any technical changes to the product’s article description that are necessary for purposes of administration;
• An estimate of the amount of loss in revenue to the United States if the duty suspension or reduction takes effect;
• A list of petitions that it does not recommend for inclusion in an MTB.

Importers can request an elimination or reduction of duties, depending on the annual duty savings anticipated and the $500,000 threshold.

The ITC’s website indicates that almost 700 (or only 28 percent) of the petitions listed in the Commission’s final 2017 report were not recommended to Congress for inclusion in an MTB.  Many of these are due to issues regarding classification and the ability of U.S. Customs and Border Protection (CBP) to administer the claimed provision.

Successful MTB petitions are compiled into a bill and presented to the House Ways and Means and Senate Finance Committees and would then need to be approved by Congress and signed into law by the president before becoming effective. If signed into law, then the MTB petitions may become effective January 1, 2021, with an expiration date of December 31, 2024.

The ITC’s new petition procedures appear more stringent than those applied during the 2016 round of MTB petitions.

The new procedures indicate that the petitions should include (to the extent available):

1. CBP rulings issued on the product;
2. a copy of other CBP documentation indicating where the article is classified in the HTS;
3. an estimate of both total value and dutiable value for the product for the next five calendar years;
4. an estimate of the share of total imports represented by the petitioner’s imports of the subject article;
5. the names of any domestic producers of the article, if available;
6. a certification of completeness and correctness; and
7. an acknowledgement of the petitioner’s awareness that the information submitted is subject to ITC audit and verification.

The USITC will take into account the Department of Commerce report, including input from CBP, and other Executive agencies, in its report. The USITC will provide its preliminary report to the House Ways and Means and Senate Finance Committees in mid-June 2020 and its final report in mid-August 2020. In between the preliminary and final reports, the USITC is directed to consider information from the congressional committees on its report. For more information on the MTB process, click here.

For more information regarding the filing or preparation of the petition, contact Diaz Trade Law today at 305-456-3830 or via email at info@diaztradelaw.com.

President Trump & CBP Aim to Collect Unpaid AD/CVD Duties

On March 31, 2017, President Trump signed an Executive Order (EO) that addressed unpaid anti-dumping and countervailing duties. This new EO, “promotes the efficient and effective administration of U.S. customs and trade laws by establishing enhanced measures to collect duties”.

What are anti-dumping and countervailing duties (AD/CVD)?

Dumping happens when a foreign company exports goods into the U.S. and sells those goods at less than fair market value. This in turn causes “injury to the U.S. industry”. Due to this, U.S. manufacturers or businesses can file a petition with the International Trade Commission (ITC), claiming that it has suffered an injury. Once the ITC finds that evidence of an injury exists, then the Department of Commerce (DOC or the Department) will investigate the claim. If the DOC determines that dumping occurred, then Customs and Border Protection (CBP) can withhold “liquidation of entries” and collect anti-dumping (AD) duties. AD “duties are calculated to bridge the gap back to a fair market value.”

Impact of Government Shutdown

Co Authored by Omar Franco 

The impact of the federal government shutdown, which began October 1, 2013, will be deeply felt by importers and exporters alike. Most government services deemed "essential" by the federal agencies will continue, but “non-essential” services will be discontinued until funding is restored.

This early on, there is no obvious resolution of the budget dispute to tie the FY-2014 government funding to Affordable Care Act (ACA) reforms. Both the House and Senate are entrenched in their positions and they are not scheduled to negotiate any time soon. One side will have to capitulate or bipartisan negotiations will have to lead to a resolution. We feel that negotiations will probably not occur this week as both sides need to assess how the markets and voters will respond to the federal government shutdown. Depending on the public response, we will see movement by one side, probably by Republicans, if the reaction is seen as damaging. As of today, the Dow was up, so the market reaction has been subdued. The reaction from voters is still unknown, but if it is subdued as well, the shutdown will be prolonged. We anticipate the shutdown will last through this week at a minimum.

Some lawmakers are considering broadening the debate by including the debt ceiling. Pressure from resolving the government shutdown could also resolve the debt ceiling issue. The longer the shutdown continues, the more likely the resolution will be tied to the debt ceiling. We do foresee a resolution emerging, however, we do not have any real idea as to what the time frame will be.

To get a glimpse of the impact on the importing and exporting community, we've included updates from the BIS and ITC below.

For example, on the export side, the Department of Commerce's Bureau of Industry and Security (BIS) has this note on its website -- they are completely SHUT DOWN, and not accepting licenses - except for emergencies.  See more here:

The Federal Government is currently shut down due to a funding lapse. As a result, the Department of Commerce's Bureau of Industry and Security (BIS) is no longer accepting export license applications, classification requests (CCATS), encryption reviews, encryption registrations, or advisory opinion requests. Similarly, BIS will not be issuing any final determinations. The SNAP-R application on BIS's Website is not available and will not reopen until the Federal Government shutdown ends. All pending export license applications, commodity classification requests, encryption reviews, encryption registrations, and advisory opinion requests will be held without action by BIS until the shutdown ends.
Applicants may request emergency processing of export license applications for national security reasons by submitting email requests to Deputy Assistant for Export Administration Matthew Borman.

The subject line of the email should read "Request for Emergency License" and the email must identify the applicant (including point of contact), intermediate and ultimate consignees, and end user(s), items, end use, and national security justification for the emergency processing.

On the import side, the impacts are distinctly felt with the U.S. International Trade Commission (ITC).  The interactive HTS that I love is not active - and ADD/CVD investigations are tolled.  CUSTOMS Info Global Data Mining has taken the opportunity to present a PDF copy of the HTSUS during the ITC's hiatus here (note you will have to provide your contact information).
See the latest from the ITC's website:

The U.S. International Trade Commission will shut down its investigative activities for the duration of the absence of appropriation. These activities include, but are not limited to, proceedings conducted under the authority of Title VII of the Tariff Act of 1930, including antidumping and countervailing duty investigations and reviews; investigations and ancillary proceedings conducted under the authority of section 337 of the Tariff Act of 1930; and investigations conducted under the authority of section 332 of the Tariff Act of 1930.

Investigations tolled 

During shutdown, the schedules and deadlines for all investigative and pre-institution activities will be tolled. All hearings and conferences will be postponed, subject to the exceptions described below. Once the Commission receives funding and the period of the shutdown ends, all schedules will resume starting with the day on which the Commission recommences operations. For example, if the shutdown lasts four days (e.g., October 1-4), then the deadline for the filing of any document on October 4 would be extended four days to October 8. If a rescheduled deadline falls on a nonbusiness day, the deadline will be extended to the next business day. The agency may reconsider schedules after resuming operations.

Exceptions

Notwithstanding the general tolling of schedules:
The staff conferences in preliminary phase antidumping and countervailing duty investigations scheduled to take place on October 7, 2013 and October 9, 2013 will take place as scheduled if the Commission resumes operations by October 3, 2013. Should the shutdown not end before October 3, 2013, all conferences will be rescheduled pursuant to the general tolling provisions described above.

The hearing in the Hot-Rolled Steel five-year reviews scheduled for October 3, 2013 will take place as scheduled if the Commission resumes operations by October 2, 2013. Otherwise, this hearing will be rescheduled upon further notice.

The hearing for Investigation No. 332-541, Trade Barriers that U.S. Small and Medium-Sized Enterprises Perceive as Affecting Exports to the European Union, scheduled to take place on October 8, 2013 will take place as scheduled if the Commission resumes operations by October 3, 2013. Otherwise, this hearing will be rescheduled upon further notice.

Website

During shutdown, the online services provided on the Commission's World Wide Web site, at www.usitc.gov, will be unavailable. This includes:

• USITC website
• EDIS
• DataWeb
• HTS Online Reference Tool
• All phone communication with USITC staff
• Restoration of service is expected as quickly as possible after appropriations become available.

If you have an questions on how the shutdown will impact your business contact Omar or me anytime.