Reducing Your Duty Rate, an Easier Way

On May 20, 2016, Congress enacted the American Manufacturing Competitiveness Act, a new law to restructure the  process companies go through to obtain temporary duty reductions and suspensions.  Previously, companies would have to petition members of Congress to submit individual bills requesting  tariff reductions, which were then accumulated and piled into one large omnibus bill known as  a Miscellaneous Tariff Bill (MTB). Under the new law, businesses will instead be able to submit their petitions directly to the U.S International Trade Commission, which in turn, shall advise Congress of the merits.

Tariff reductions are a great relief for US companies which import products.  The imported articles are often ingredients or components used to manufacture a finished American product. To qualify for duty relief,

  • The item at issue must be exclusively produced outside of the US (If there is any domestic production, there must be no objections by competing US companies);
  • The reduction must cost the US Treasury no more than $500,000 in lost tariff revenue per year; and
  • The relief must be uncontested by any member of Congress.

New the Process for MTB

Under the new law The International Trade Commission will open the floor for petitions and you will have 60 days to file your petition beginning this fall on October 15, 2016. When this window closes, it will not reopen for another three years in October of 2019.

The following must be included when filing a petition as stated by the  American Manufacturing Competitiveness Act :

  1. Name and address of the petitioner.
  2. Statement of whether the petition is for an extension of an existing duty suspension or reduction, or for a new one.
  3. A certification that the petitioner is a likely beneficiary of such a duty suspension or reduction
  4. Descriptions of the article covered by the duty suspension or reduction.
  5. Classification ruling and location of the article under the Harmonized Tariff Schedule of the United States (HTSUS) and relevant documentation.
  6. Description of the U.S. industry that uses the item.
  7. An estimate of the total value (in US dollars) of imports of the item for each of the five calendar years after the petition is filed.
  8. If available, The name of each person that imports the item.
  9. If available, a description of any domestic production of the item.

 

Following the submission period, the ITC will publish what was received and there will be a 45 day window for public commentary on the submitted petitions.  After taking public comments, the Commission will submit a preliminary and then final report(s) to Congress on each individual petition for tariff suspension or reduction.  Congress will prepare the MTB legislation based on the recommendations provided by the ITC.  At no point can Congress insert new items on the list given to them by the ITC, but they do have the authority to reject or amend a proposal.  Congress has no deadline for the enactment or introduction of MTB legislation, but given the timeline, it is possible to see it in the latter half of 2017, given the October petition date.

We are more than happy to help you, our friends and clients, apply for relief this year! Contact us today!

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