CBP Discusses Some Ongoing Issues With Section 232 Enforcement

The Section 232 quotas on steel and aluminum from certain countries and exclusions from the Section 232 tariffs are among the toughest procedural challenges CBP is facing in dealing with those trade remedies, CBP officials from the Base Metals Center of Excellence and Expertise recently told the American Institute for International Steel. AIIS said in its newsletter that the group's customs committee held a conference call on Sept. 6 with Center Director Africa Bell and other officials. CBP is in the process of making fixes to aid in the remedying of those problems, it said.

CBP had to develop new procedures to handle the absolute quotas in ACE, it told AIIS. Also new were administering annual quotas with "the quarterly sub-limitations imposed under Section 232," it said. The agency's practice of only processing quotas once a day at 8 p.m. has also caused some frustration due to the late release and that means "that any allocations required due to oversubscribed quotas occur late in the day," AIIS said. "CBP is working on procedures to allow for hourly processing, but they are not there yet."

Product exclusions from the Section 232 tariffs have also posed some issues, CBP told AIIS. While relatively few exclusions have been granted by the Commerce Department, "one problem that has occurred is that the granting of the exclusion by the Commerce Department is not fully effective until the importer specifically advises CBP, with the applicable importer of record number; this is done through an email filing to the Trade Remedy email box," AIIS said. "This must be accomplished before any entry claim will be accepted. For entries already filed but covered by the retroactive nature of an exclusion, a Post Summary Correction should be used to secure the duty refund." The process for claiming exclusions has been incorporated into ACE, the agency said.

CBP is looking at comparisons of trade patterns before and after the Section 232 tariffs to "identify changes after the 232 duties took effect, including changes in country of origin, classification, terms of sale, and other value issues," the officials told AIIS. All Section 232 imports are more likely to be examined and "physical inspections include both the usual random checks and targeted reviews for suspected problems" in an effort to differentiate legitimate imports from the illegitimate, CBP told AIIS. CBP didn't comment on a question about this from International Trade Today.

The Base Metals Center noted an increase in "Deliver Duty Unpaid" and "Deliver Duty Paid" terms of sale and "non-dutiable" charges. "Problems encountered include issues of how to calculate entered values, and the lack of documentation, whether for proof of payment, actual freight charges, through bill of lading, or other claimed charges," the officials told AIIS. "The Center suggests that importers have the necessary documents in hand when filing an entry, and have their brokers file them electronically at the same time the Entry Summary is filed, in order to reduce requests for further information and missing documents. Importers that have been assigned to a team at the Center should consider providing information on any significant changes in import procedures due to Section 232 at or before the first entry of goods involving such changes."

Importers may want to project bond coverage needs based on the coming 12 months and not the previous 12 months of activity, CBP said. That would avoid the need for multiple bond revisions during a short period of time, something that sureties have seen increase due to new tariffs (see 1808210029). CBP will continue to take action to protect revenue, including through single entry bonds as much as three times the shipment value, AIIS said. "There is also a pilot program on bond coverage working on procedures to determine bond amounts based on risk analysis rather than the automatic application of the current formula," it said.

Early on after the tariffs took effect, there were some issues on "the handling of HTS 9801, HTS 9802, and [temporary import under bond (TIB)] entries at the Northern border, primarily due to these matters having previously been of little concern for unconditionally duty free steel mill products," CBP told AIIS. "One point made was that for purposes of determining origin when applying the Section 232 remedies to these special provisions, standard substantial transformation rules rather than NAFTA rules of origin apply," AIIS said.