BACKGROUND

On October 2, 2019, the U.S. Trade Representative (USTR) published Federal Register (FR) Notice 84 FR 52553 announcing the decision to grant the third round of certain exclusion requests from the 25 percent duty assessed under the Section 301 investigation related to goods from China ($16B Action - Tranche 2).

These product exclusions relate to the imposed additional duties announced in 83 FR 40823 on Chinese goods with an annual trade value of approximately $16 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 August 23, 2018 effective date of the $16 billion action (Tranche 2), and will extend for one year after the publication of 84 FR 52553.

The exclusions are available for any product that meets the description as set out in the Annex to Federal Register Notice 84 FR 52553, 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 product exclusions for articles from China specific to Tranche 2 of Section 301 duties is available in the Automated Commercial Environment (ACE) as of October 8, 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 52553 are as follow:

· In addition to reporting the regular Chapters 39, 70, 73, 84, 85, 86, and 90 classifications of the HTSUS for the imported merchandise, importers shall report the HTSUS classification 9903.88.20 (Articles the product of China, as provided for in U.S. note 20(y) 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 9903.88.20 is submitted.

· Please note: Paragraph B and C of the Annex correct errors by removing U.S. notes 20(v)(55) and 20(v)(88) of subchapter III of chapter 99 of the HTSUS, as set out in the Annex to the notice published at 84 FR 49600 (September 20, 2019).

ADDITIONAL INFORMATION

Duty exclusions granted by the USTR are retroactive for imports on or after the initial effective date of August 23, 2018 (83 FR 40823). 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, they should refer to CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTS in ACE).

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, a summary of Section 301 actions are provided below: