It has been almost a year since the first round of Section 301 China tariffs went into effect on July 6, 2018.  Since that time, the Office of the United States Trade Representative (USTR) has reviewed thousands of product exclusion requests on Lists 1 and 2.  Granted product exclusions are retroactive to the date of the imposition of additional duties under Section 301, and extend for one year after the publication of the exclusion notice in the Federal Register.  This post summarizes guidance issued by the U.S. Customs and Border Protection to obtain and preserve rights to refunds on excluded products.

Customs Guidance for Entry of Excluded Products and to Request Refunds 

To date, there have been five rounds of granted exclusion requests.  For each round of granted exclusions, Customs has issued guidance on how to submit entries of excluded products and the procedures to obtain refunds.   The Customs guidance is linked in the chart below.

Granted Exclusions Federal Register Notice Customs Guidance
Round 1 83 Fed. Reg. 67,463 CSMS 19-000052
Round 2 84 Fed. Reg. 11,152 CSMS 19-000155
Round 3 84 Fed. Reg. 16,310 CSMS 19-000212
Round 4 84 Fed. Reg. 21,389 CSMS 19-000244
Round 5 84 Fed. Reg.  25,895 CSMS 19-000289

Product exclusions granted by USTR so far are retroactive to July 6, 2018, for unliquidated entries or entries that are liquidated but not final.  Liquidation is the final assessment of duties owed on an entry, and generally occurs within 314 days of an entry.  However, liquidation may occur faster than the 314-day cycle.  In any event, liquidation must occur within one year of the date of entry unless otherwise extended. Importers must diligently monitor the liquidation status of entries of excluded products and exclusion requests pending review to protect their rights to refunds.

Once a product exclusion is granted by the USTR, an Importer of Record may request an administrative refund by filing a Post Summary Correction (PSC) for unliquidated entries that are covered by the exclusion. If an entry is liquidated prior to the filing of a PSC, a party may file a formal CBP Form 19 protest of the liquidation to obtain a refund.    Form 19 protests must be filed within 180 days of liquidation.

Entries Covered by Pending Product Exclusion Requests

Given that liquidation deadlines are fast-approaching for many entries covered by Section 301 (if they have not already occurred), Customs recently issued guidance to U.S. importers concerned that entries may liquidate before the USTR renders a decision on product exclusion requests.  This guidance applies to importers of products pending exclusion review on Lists 1 and 2.

The Importer of Record may:

(1) request an extension of the liquidation deadline, and file a PSC no later than 15 days before the extended date of liquidation; and/or

(2) file a protest within the 180 day period following liquidation. When filing a protest, the protestant should identify the pending product exclusion decision from USTR as a basis for the protest. Upon receiving USTR’s decision on the product exclusion, the protestant should submit the exclusion information to CBP, as additional information pursuant to 19 C.F.R. 174.28.

If a protest is filed, CBP will postpone making a determination on protests that include a claim identifying a pending product exclusion. Once USTR completes the exclusion processing, CBP will process these protests pursuant to USTR’s exclusion determination. That is, CBP will refrain from denying or granting a party’s protest before the importer receives a final determination from USTR regarding its product exclusion request.

For more information about the Section 301 exclusion process, the procedure to  obtain refunds, or the submission of extension requests of liquidation, please contact Fox Rothschild attorneys Brittney Powell, Lizbeth Levinson, or Joseph Rohe.

Note: The exclusion process for List 3 products will commence on June 30, 2019.