President Obama signed the revised duty suspension bill into law yesterday.   Here is a link to the announcement by House Ways & Means Chairman Brady – http://waysandmeans.house.gov/competitive/, AND below is a memo I wrote:

The American Manufacturing Competitiveness Act of 2016

New Process for U.S. Duty Suspensions

The American Manufacturing Competitiveness Act of 2016 (AMCA), signed into law by President Obama on May 20, 2016, establishes a new process for manufacturers to make requests for relief from import duties where there is either no or insufficient domestic availability of the product being imported.  The entire process for obtaining these duty suspensions should take about a year.  Typically, the imported products consist of raw materials or intermediate products that are needed by U.S. manufacturers but are not produced or available in sufficient quantity domestically.  Previously, Congress periodically considered duty suspension requests by the introduction of individual bills that were consolidated into a Miscellaneous Tariff Bill (MTB).  The last MTB passed by Congress expired on December 31, 2012.  AMCA reforms the process to avoid the Congressional prohibition on earmarks.  Duty suspensions were considered earmarks because they were viewed as providing a “limited tariff benefit,” which is defined under the House Rules as benefiting 10 or fewer entities.

Summary of The New Process

AMCA reforms the process for compiling MTBs by eliminating Member initiation of MTBs and introducing a new process at the U.S. International Trade Commission (USITC), which is initiated by petitions made by companies seeking relief from duties.  AMCA mandates that the USITC publish a notice in the Federal Register no later than October 15, 2016, soliciting petitions or requests for duty suspensions or reductions.

The process requires the USITC to submit a preliminary and final report on the petitions it has compiled. The USITC is required to deliver its final report to Congress no later than 300 days after the date on which publishes its notice soliciting industry petitions for duty suspensions.   The preliminary report is due no later than 30 days after the expiry of 120-day period that begins with the USITC publication of the petitions.  No later than 90 days after the USITC publication of the petitions and prior to its issuance of the preliminary report, the executive branch (Department of Commerce) must provide input on: (1) whether there is any domestic production or whether there is any domestic opposition; and (2) technical changes needed to administer the duty suspensions.

The USITC’s preliminary report provides information on each petition.  It must indicate whether there is any domestic production of the product for which a duty suspension is sought and any technical modifications to the description of the article.  The preliminary report must also specify the amount of tariff revenue the U.S. would forgo, whether the duty suspension/ reduction is generally available to anyone that imports the product, and a statement identifying the “likely beneficiaries” of the proposed duty suspension/ reduction.  The USITC must categorize the petitions in the preliminary report into one of the following six buckets:

  1. Those recommended to be enacted without change
  2. Those recommended with technical corrections
  3. Those modifying the duty suspension to comply with the law’s requirement that the loss of revenue not exceed $500,000 in a calendar year
  4. Those where the USITC recommends modifying the scope of the subject article
  5. Those not recommended for inclusion in a MTB because the petitioner did not provide sufficient information or the petitioner is not the likely beneficiary
  6. Those rejected for other reasons.

The final report contains much the same information as the preliminary report.  It must also contain a finding that each duty suspension or reduction can be administered by CBP, that the estimated lost revenue for each good does not exceed $500,000 annually, as determined by the Congressional Budget Office, and that the particular duty suspension/ reduction is generally available to anyone importing the product.

The final step is for Congress to draft a final MTB package which can exclude any petition that the USITC has identified for inclusion in its final report, is subject to an objection by a member of Congress, or is for an article for which there is domestic production.

If your company is interested in petitioning the USITC for a duty suspension, please do not hesitate to contact Evelyn Suarez, Esq. at via our Contact Form or at esuarez@suarezfirm.com.