Congress Passes Measure to Facilitate the Reduction of Duties on Certain Imports
On May 11, 2016, Congress passed the American Manufacturing Competitiveness Act of 2016 ("Act"). The Act reforms the Miscellaneous Tariff Bill ("MTB") process, pursuant to which Congress suspends or reduces tariffs on merchandise imported into the United States. While measures to suspend or reduce tariffs currently must be introduced by members of Congress, the Act shifts much of the responsibility for administering tariff suspensions or reductions to the U.S. International Trade Commission ("ITC"). President Obama is expected to sign the Act into law in the coming days.
Under the Act, the revised MTB process will involve the following five steps:
- ITC Issues Notice and Petitions are Filed. No later than October 15, 2016, the ITC will publish a notice in the Federal Register requesting petitions from members of the public who can demonstrate that they are likely beneficiaries of duty suspensions or reductions. The period for filing petitions will remain open for 60 days.
- ITC Reviews Petitions and Public Comments are Submitted. No later than 30 days after the 60-day period for filing petitions expires, the ITC will publish the petitions online and will issue a Federal Register notice seeking public comments. The comment period will remain open for 45 days.
- ITC Issues Preliminary Report. No later than 30 days after conclusion of the ITC's review of, and the public comment period for, the petitions, the ITC will submit to the appropriate congressional committees a preliminary report on the petitions for duty suspensions and reductions. The preliminary report will provide, among other information, estimates of lost U.S. government revenue resulting from the duty suspensions or reductions. In addition, the preliminary report will include, among other lists, a list of petitions that the ITC does not recommend for inclusion in the MTB. After reviewing the preliminary report, appropriate congressional committees may submit additional information relating to petitions that the ITC did not recommend for inclusion in the MTB, which the ITC must consider.
- ITC Issues Final Report. No later than 60 days after submission of the preliminary report, the ITC will submit to the appropriate congressional committees a final report on each petition for duty suspension or reduction, which will include a determination regarding whether the MTB criteria are satisfied. The two key criteria for evaluating whether merchandise should be included in the MTB are: (i) the domestic production of the merchandise, i.e., whether there is no domestic availability or insufficient domestic availability; and (ii) the U.S. government's revenue loss, i.e., whether the duty suspension or reduction would cost the U.S. government more than $500,000 in duty revenue annually.
- Congress Reviews Final Report and Issues the MTB. Congress subsequently will consider the ITC's final report, as well as a report prepared by the U.S. Department of Commerce, in consultation with U.S. Customs and Border Protection and other relevant federal agencies, to identify merchandise to include in the MTB. No later than 90 days after receiving the ITC's final report, Congress will prepare the MTB to implement duty suspensions and reductions. While Congress may include in the MTB only the merchandise identified in the ITC's final report, Congress also may exclude any such merchandise from the MTB.
Jones Day attorneys are available to assist companies in identifying eligible merchandise, evaluating the associated domestic production and the U.S. government’s revenue from duties associated with imports of such merchandise, and preparing petitions for duty suspension or reduction.
For further information, please contact your principal Firm representative or one of the lawyers listed below. General email messages may be sent using our "Contact Us" form, which can be found at www.jonesday.com/contactus/.
Chase D. Kaniecki
Christopher M. Tipler
Jones Day publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our "Contact Us" form, which can be found on our website at www.jonesday.com. The mailing of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.