Legal Alerts/12 Oct 2016

Save Money on Your U.S. Imports (Hopefully)

After a break of about five years, the Miscellaneous Tariff Bill, which suspends collection of certain U.S. Customs tariffs, is back again, but with certain twists. The revised filing process, which begins this October 15th, has been amended, and the policy behind reenacting the bill means companies may need to give extra consideration when categorizing dutiable goods in order to maximize their potential relief.

The Old Process

Previously, industry-oriented organizations petitioned Congressional delegates on behalf of their member entities to introduce tariff reduction bills. After the delegates submitted bills, the International Trade Commission would then determine the merits of these bills, granting, modifying or denying them. Since Congressional delegates were the ones responsible for submitting these bills, the process seemed susceptible to favoritism or unwanted influence.

The New Regime

The new rules instead require companies that may benefit from duty relief to file a petition with the International Trade Commission, which then recommends a decision on each petition to the Congressional delegates.

As this is the first time this process has been attempted, specifics on the filing details and petition outcomes are still unclear. Petitions will begin to be accepted through an online portal on October 15th for a period of 60 days.

Congress’ main purpose in reviving the bill was to avoid allowing duty relief on imported goods that:

  1. directly compete with a domestic producer of the same product; and
  2. cost the government more than USD 500,000 in lost tariff revenue per category of imported good.

Such explicit guidelines were not previously part of the bill, and the limits per category may have significant impact on the amount of relief available.

Follow-up

It is now even more important for petitioner companies to be specific in what category their dutiable goods fall under, and understand the market of such dutiable goods to improve their petition’s likelihood of maximum relief.

We recommend that companies gather as much information on their dutiable goods and markets as soon as possible to be in a position to file their petitions early on in the acceptance period.

For further information, the International Trade Commission has set up a website for this process.

Borenius’ lawyers are available to assist in addressing any questions you may have regarding this client alert. Please feel free to contact any of the Borenius attorneys listed in this alert or those with whom you usually work.

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