On September 11, 2018, the Department of Commerce ("Commerce") issued an interim final rule in the Federal Register updating the process by which companies may request exclusion from additional duties on steel and aluminum articles pursuant to Section 232.

By way of background, on March 8, 2018 President Trump issued Proclamations 9704 and 9705 (referred to henceforth as the ''Proclamations''), which imposed 10% duties on imports of aluminum and 25% duties on imports of steel. The Proclamations also authorized Commerce to grant exclusions from the duties in cases where a steel or aluminum article is not produced in the United States in a sufficient quantity or of satisfactory quality, or if the steel or aluminum article should be excluded from the duties based on national security considerations.

The original process for requesting an exclusion from the Section 232 duties on steel and aluminum was published as an interim final rule on March 19, 2018 (the "March 19 Rule").1 Under the March 19 Rule, parties submitted a product-specific request to exclude a particular steel or aluminum article, then interested parties had 30 days to submit objections to the exclusion request. As of August 20, 2018, Commerce has received more than 38,000 exclusion requests and more than 17,000 objections. After publishing the March 19 Rule, Commerce received 67 public comments, and many commenters raised concerns over a lack of due process, fairness, or transparency.

In light of the public comments on the March 19 Rule and based on Commerce's "experience with managing the exclusion and objection process," Commerce also published changes to the exclusion process, most notably by adding a rebuttal and surrebuttal process. The changes are made by amending the two supplements to the National Security Industrial Base Regulations that were added on March 19 (the "Supplements").2 In paragraph (f) of both Supplements, Commerce describes the new rebuttal process, specifies size and time limitations, and provides criteria that a good rebuttal must address. Only parties that have submitted an exclusion request and received an objection may submit a rebuttal to the objection(s). Importantly, the rebuttal period will last only seven days and will begin after Commerce posts all of the objections received on an exclusion request.

Paragraph (g) of the Supplements has been amended to add the surrebuttal process. The surrebuttal process is only applicable to parties that submitted objections to an exclusion request and received a rebuttal to the objection. The surrebuttal period is also only seven days and opens after the last rebuttal to the objection is posted. In addition to the new rebuttal and surrebuttal processes, the new changes include:

Makes explicit the procedures for protecting and submitting confidential business information;

  • Clarifies certain confusing aspects of the exclusion request form;
  • Specifies in greater detail the criteria Commerce uses to review exclusion requests;
  • Clarifies the criteria for which parties may submit an objection to an exclusion request and the criteria used to review objections; and
  • Adds a process for a streamlined review of "No Objection" exclusion requests.

The above list is not exhaustive and many other minor changes were made to the exclusion request and objection process.

Footnotes

[1] Requirements for Submissions Requesting Exclusions from the Remedies Adjusting Imports of Steel and Aluminum into the United States, 83 Fed. Reg. 12,106 (Mar. 19, 2018) (to be codified at 15 C.F.R. pt. 705), available at https://www.gpo.gov/fdsys/pkg/FR-2018-03-19/pdf/2018-05761.pdf.

[2] Supplement Nos. 1 and 2 to 15 C.F.R. Part 705 (2018).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.