Act Now: Clock Starts to Request Duty Reduction or Suspensions

3 min

If you are seeking a new temporary duty suspension or duty reduction for a product you import, or if you want to extend an existing reduction or suspension beyond 2012, you have until Monday, April 30 to seize the opportunity or risk waiting several years before getting another chance. 

Last week, Congress took the first step in what has become a biannual process to pass a miscellaneous tariff bill (MTB).  This legislation temporarily reduces or suspends duties on certain U.S. imports and makes other technical corrections to the U.S. Harmonized Tariff System (HTS).  The MTB consists of many individual tariff adjustment bills aggregated into a single legislative package subject to a single vote by Congress.

In a letter sent to members of Congress on Friday, March 30, Chairman Camp of the House Ways and Means Committee and Senator Baucus of the Senate Finance Committee announced that all Members must introduce stand-alone MTB legislation by Monday, April 30, in order for the legislation to be considered for this year’s MTB.

The short deadline is one of several hurdles that must be overcome during the MTB process.  Each bill is subjected to close scrutiny by Congress, the Congressional Budget Office (CBO), the U.S. International Trade Commission (ITC), and a number of Executive Branch agencies, such as the Department of Commerce and U.S. Customs and Border Protection (CBP). 

For a tariff modification bill to be eligible for inclusion in the MTB, its proponents must be able to prove that the bill (1) is non-controversial, and (2) is revenue-neutral, defined as costing under $500,000 per year. 

An MTB provision is deemed “controversial” if it is objected to by another Member of Congress or by a domestic producer.  The House Committee defines “domestic producer” as "a person or firm that demonstrates production, or imminent production, of the article or a like or directly competitive article.”  For an objection from a domestic firm to render a bill ineligible, the objection must be based on valid, existing economic concerns. 

Bill sponsors are expected to submit the necessary information to each of the reviewing entities.  This may include information on the scope of importation including trade volume, dollar cost of trade, and estimated revenue loss.  It could also include technical information including proper nomenclature, HTS heading, and Chemical Abstracts number, if applicable. 

The ITC prepares a report for Congress on each provision that summarizes the information noted above and lists other domestic firms contacted by the ITC, each firm’s position on the proposed provision, and any letter either supporting or opposing the duty suspension from possible competitors.  Where applicable, the ITC can act as a broker.

Ultimately, the House Ways and Means Committee and the Senate Finance Committee make the final determination as to whether each bill meets the requirements and is eligible for inclusion in the MTB.  However, the generally apolitical nature of the vetting process ensures that recommendations from the ITC and Administration are given appropriate consideration. 

What Should Clients Do to Protect Their Interests?

An interested firm should contact Members of Congress from the firm’s district and State to discuss introducing a MTB provision before April 30.  The firm should assist the Member’s staff in collecting the information on the provision’s eligibility.

Clients also should be mindful of instances where an uncompetitive product falls within a so-called basket category in the HTS that contains similar products that are considered more competitive.  Typically this arises in the context of chemical compounds.  In these cases, clients should craft the MTB legislation to create a new HTS subheading with a reduced or suspended duty for the particular product without affecting the tariff on the more import-competing products in the basket category.

Our Venable team is available to assist with this process.  For more information, please contact any of the attorneys in our International Trade and Customs Group.