U.S. International Trade Commission Issues Preliminary Recommendations for Miscellaneous Tariff Bill, Will Consider Comments on Certain Rejected Petitions

International Trade Update

Date: June 12, 2017

On May 20, 2016, former President Obama signed into law the American Manufacturing Competitiveness Act of 2016 (AMCA), reinstating and reforming the Miscellaneous Tariff Bill (MTB) process. The MTB process allows U.S. manufacturers, importers, distributors, retailers and wholesalers to obtain tariff relief (for a three-year period, which can be extended) that eliminates or significantly reduces import duties on products unavailable in the United States. On October 14, 2016, the U.S. International Trade Commission (ITC) began accepting MTB petitions for duty suspension or reduction (see Thompson Hine’s previous update, “ITC Launches New MTB Petition Process”).

On June 9, 2017, the ITC released its preliminary report on the petitions received. Of the 3,162 petitions received during the petition submission period, the ITC is providing recommendations for 2,536 .[1] The following is a breakdown of these petitions, based on product category:

  • Chemicals: 1,473
  • Machinery and equipment: 457
  • Textiles, apparel and footwear: 459
  • Agriculture and fisheries: 36
  • Other: 111

In its preliminary report, the ITC was required to place the petitions into one of six categories: (i) a petition that meets the requirements of the AMCA without modification (Category I), (ii) a petition that meets the AMCA requirements with certain modifications (Category II, III or IV), (iii) a petition that does not contain the information required by the AMCA or was not filed by a likely beneficiary (Category V), or (iv) a petition that the ITC does not recommend for inclusion in a MTB (Category VI).

Notably, in Category VI, the ITC rejected applications for 764 imported items that petitioners had requested. The ITC rejected these petitions due to:

  1. The article description could not be administered, taking into account the findings of a joint report issued by the U.S. Department of Commerce, in consultation with U.S. Customs and Border Protection.
  2. Not being able to discern which article of commerce the petitioner intended to cover, which meant that the ITC could not estimate dutiable imports and revenue loss.
  3. Objections from a domestic producer, based on information contained in the aforementioned joint report or in public comments submitted to the ITC.
  4. Petitions for which the estimated Customs revenue loss exceeded $500,000, even for a duty reduction of only 0.1 percent.

The ITC will accept additional comments from the public on any petitions that are listed as Category VI Petitions for a 10-day period beginning June 12, 2017 and concluding June 21, 2017 at 5:15 p.m. (EDT). All such comments must be submitted electronically through the ITC's MTB Petition System website at https://www.usitc.gov/mtbps. Comments filed in paper form or in any other form or format will not be accepted.

The ITC will only accept information from the public that relates to its decision to place these petitions into the rejected Category VI. The public will be able to comment on the administrability of the article descriptions in the petitions, the existence of domestic producer objections to the petitions, and other issues affecting their placement in Category VI. In particular, the ITC seeks input that would clarify or narrow the scope of proposed article descriptions in Category VI petitions, including the constituent materials in the intended merchandise or similar information that would help verify the classification of the goods in chapters 1-97 of the Harmonized Tariff Schedule. For Category VI, the ITC seeks information that could clarify technical criteria, distinguish the intended merchandise in a petition from other goods in the same rate line, or narrow the scope of an article description to avoid covering domestically produced goods.

The ITC will submit its final recommendations to the House Committee on Ways and Means and the Senate Committee on Finance by August 8, 2017.

FOR MORE INFORMATION

For more information, please contact:

David Schwartz
202.263.4170
David.Schwartz@ThompsonHine.com

Mark Lunn
202.263.4115
Mark.Lunn@ThompsonHine.com

Karyna Valdes*
202.263.4183
Karyna.Valdes@Thompsonhine.com

Scott Diamond
Senior Legislative & Regulatory Policy Advisor
Not licensed to practice law
202.263.4197
Scott.Diamond@ThompsonHine.com

or any member of our International Trade group.

*Karyna is not admitted to practice in the District of Columbia. She is admitted to practice only in Florida. Her work is supervised by principals of the firm.

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[1] 626 petitions were withdrawn by the petitioners from consideration.