Don’t Let the Opportunity To Lower Your Duty Payments Pass You by — Miscellaneous Tariff Bill Process Now Underway

The American Manufacturing Competitiveness Act of 2016, 19 U.S.C. § 1332 note, establishes the authority, criteria, and procedure for the public to request the temporary suspension or reduction of duties on imported articles. Although one of the purposes of the Act is to reduce production costs for US manufacturers and ensure that foreign competitors are not at a competitive sourcing advantage, the duty reductions are not limited to manufacturing inputs or raw materials. Requests can be submitted for any imported articles meeting the criteria noted below.

Petitions must be submission using the ITC’s MTB Petition System online portal at mtbps.usitc.gov, which contains guidance for filing. The petition must propose a description that includes a specific class or kind of imported merchandise and briefly lists the discernable physical characteristics of the product at the time of importation. It must also identify the proper 8-digit classification of the product under the Harmonized Tariff Schedule of the United States (HTSUS). The petitioner might apply for a US Customs and Border Protection (CBP) ruling to assist.

To receive ITC’s recommendation for inclusion in the MTB, a petitioner must certify or demonstrate the following:

• The petitioner is a “likely beneficiary” of the duty suspension or reduction, that is, “an individual or entity likely to utilize, or benefit directly from the utilization of, an article that is the subject of a petition for a duty suspension or reduction.” This might include a firm, importer, manufacturer, or government.

• There is no domestic production of an article “identical to, or directly competitive product with” the article to which the petition would apply. Petitions must generally be non-controversial, meaning without objection from a domestic producer.

• The duty suspension or reduction is administrable by CBP. ITC may combine similar petitions for this purpose.

• The estimated loss in revenues due to the duty suspension or reduction does not exceed $500,000 per calendar year. A petitioner might consider requesting a reduction instead of a suspension, or a smaller reduction, to bring the expected revenue loss within this amount.

• The duty suspension or reduction will be available to any person importing the article.

The petition must also contain various data elements, including (1) an estimate of both total value and dutiable value for the product for the next five calendar years; (2) an estimate of the share of total imports represented by the petitioner’s imports of the subject article; (3) the names of any importers and domestic producers of the article, if available; (4) a certification of completeness and correctness; and (5) an acknowledgement of the petitioner’s awareness that the information submitted is subject to ITC audit and verification.

Under the MTB timeline, ITC will post the petitions online for public comment, including objections, within 30 days of the closing of the petitioning period. The comment period will remain open for 45 days. Next, through an interagency process, ITC will accept withdrawals, make corrections, and provide its recommendations on the petitions to Congress, which will consider them for inclusion in an MTB as a heading 9902 HTSUS provision. If the bill is enacted, the duty suspensions or reductions would be effective January 1, 2021 through December 31, 2023.

The Act reformed a process whereby parties would request duty savings by direct lobbying to Congress. During the 2016 MTB process, the most recent and the first under the Act, the ITC considered a total of 2524 petitions, 72% of which it recommended for inclusion. The resulting Miscellaneous Tariff Bill Act of 2018 was expected to provide up to $1.1 billion in duty savings on 1660 imported articles over the period October 13, 2018 through December 31, 2020.

Arent Fox has experienced customs attorneys who can assist companies considering whether to file a petition for a new duty suspension or reduction, or a renewal of an existing provision.