Both sets of exclusions are retroactive, and refunds may be sought for products previously imported within specific time periods.
The U.S. Trade Representative has announced expanded product exclusions following both the spread of COVID-19 and the trade deal signed with China in January 2020.
Both sets of exclusions are retroactive, and refunds may be sought for products previously imported within specific time periods. U.S. Customs and Border Protection has stated that “[t]o request a refund of Section 301 duties paid on previous imports, importers may file a Post Summary Correction (PSC) if within the PSC filing timeframe. If the entry is beyond the PSC filing timeframe,” but within 180 days of the liquidation action, "importers may protest the liquidation.” See CSMS #42049352.
Exclusions for Medical Products to Fight COVID-19
Since our previous Alert on Section 301 product exclusions granted by the USTR in connection with the COVID-19 pandemic, the USTR has granted additional Section 301 exclusions for certain medical products that were published on March 17, 2020. These March 17 product exclusions apply to 19 additional HTSUS numbers and relate to a wide range of medical products including, among other things, certain bowls of molded plastics (3926.90.9990), certain cold packs (6307.90.9889) and certain protective articles (9004.90.0000).
Similar to the Section 301 product exclusions announced on March 12, 2020, the March 17 product exclusions are retroactive in nature such that entities can seek refunds of the Section 301 duties that they have paid on the excluded products dating back to September 1, 2019. The combined exclusions will entitle the subject products to exemptions until September 1, 2020.
The new product exclusions are available for any product that is listed in the Annex of the March 17 Federal Register notice, regardless of whether a company filed for an exclusion request.
Phase 1 of China Deal Moves Forward
As the United States and China work on implementing the Phase 1 Trade Deal that they signed in January 2020, the USTR continues to evaluate the many thousands of Section 301 product exclusion requests that they have received, and, in some instances, has decided to grant them. For example, on March 16, 2020, the USTR announced that it was granting exclusions for a wide range of products. As a result of this announcement, Section 301 duties will no longer have to be paid on the identified products, and significantly, entities may seek refunds on the Section 301 duties that had been paid on the identified products dating back to September 24, 2018.
The recently announced product exclusions are set forth in the Annex of the March 16 Federal Register notice. Any entity that imports the specified products may take advantage of the exclusion opportunities regardless of whether they filed any exclusion requests. To determine whether an exclusion applies, companies should examine the relevant HTSUS classifications for their products, as the exclusions only apply to products listed under the relevant 10-digit HTSUS numbers that are identified in the Annex. These products include, among other things, certain sacks and bags for packing (3923.10.0030), certain disposable rubber gloves (4015.19.1010), certain nonwoven covered or coated materials (5603.12.0090).
About Duane Morris
Attorneys in the firm’s International Group have considerable experience in assisting clients in developing duty-saving strategies. Toward this end, Duane Morris attorneys have prepared numerous Section 301 product exclusion requests that have been granted by the USTR, and they have experience in assisting clients in filing submissions, including protests, with CBP to obtain refunds on Section 301 duties that had previously been paid prior to the product exclusions being granted by the USTR.
Furthermore, the Duane Morris COVID-19 Strategy Team is advising clients on all aspects of the legal implications of COVID-19 including contractual, employment, insurance and healthcare issues. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.
For More Information
If you would like further information about this Alert or the procedures for seeking refunds from CBP relating to Section 301 product exclusions or the process for seeking to have Section 301 product exclusions be extended, please contact Brian S. Goldstein, Geoffrey M. Goodale, J. Manly Parks, Patrick C. Gallagher, Ph.D., Nathan B. Reeder, any of the attorneys in our International Group, any of the attorneys in the Life Sciences and Medical Technologies Industry Group, any member of the COVID-19 Strategy Team or the attorney in the firm with whom you are in regular contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.