CBP Issues Guidance on Deactivating
Section 232 Exclusions that
are Approaching Threshold Limits

January 8, 2024

In CSMS # 58942510, dated 1/5/2024, CBP issued guidance on deactivating certain Section 232 exclusions when the imported quantities are approaching the threshold limits.

Background

The Bureau of Industry and Security (BIS), within the Department of Commerce (DOC), grants exclusions to the Section 232 import duties and quotas on steel and aluminum imports. BIS allocates specific quantities of imports which can be imported under each exclusion. When imports under an exclusion reach the quantity limits of a Section 232 exclusion, that exclusion is no longer valid, and duties under Section 232 measures apply.

In July of 2023, the Government Accountability Office (GAO) issued a report on “Steel and Aluminum Tariffs: Agencies Should Ensure Section 232 Exclusion Requests Are Needed and Duties Are Paid”. The report concluded that importers have been improperly importing goods in excess of the granted Section 232 exclusion amounts that has resulted in over $29 million of Section 232 duties owed by these importers. 

CBP Guidance

Effective February 15, 2024, for certain types of Section 232 exclusions, the Trade Remedy Branch in the Office of Trade will deactivate Section 232 exclusions in ACE on a weekly basis when the imported quantity for each exclusion is greater than or equal to 95 percent of the allocated quantity. This is a change from the current practice of deactivating Section 232 exclusions when the imported quantity of each exclusion reaches or exceeds 100 percent of the allocated quantity.

The following Section 232 exclusions will be deactivated at the 95 percent threshold:

  • Exclusions for non-quota countries i.e. those subject to Section 232 duties,
  • Exclusions for European Union (EU) countries that are subject to Section 232 steel tariff rate quotas (TRQs), and
  • Exclusions valid for multiple countries subject to both Section 232 duties and any quotas.

When Section 232 exclusions are deactivated in ACE, importers will no longer be able to use the Section 232 exclusions on new entry summaries and will have to deposit the appropriate Section 232 duties on any new entry summaries. When certain exclusions are deactivated at less than 100 percent of the quantity, importers can choose to file a Post Summary Correction (PSC) to claim the remaining exclusion amounts and request a refund of any Section 232 duties paid.

For exclusions that are valid for multiple countries subject to both Section 232 duties and quotas, and that are deactivated at less than 100 percent of the allocated quantity, importers can only file a PSC for the Section 232 duty countries or the EU steel tariff rate quotas, to claim the remaining exclusion quantity amounts.

All other Section 232 exclusions will remain at the 100 percent threshold for deactivation. These other exclusions cannot be deactivated at less than 100 percent because importers are not able to use a PSC in ACE to claim the remaining exclusion amounts.

For questions regarding Section 232 trade remedies and exclusions, or other customs and trade related matter, please contact us at inquiry@tuttlelaw.com or (415) 986-8780.

The information in this article is general in nature and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence and may not be considered as such.

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