2019 has proven to be an active year in many regards, but especially when it comes to businesses trying to effectively manage the movement of goods around the world. Companies have encountered punitive tariffs, Free Trade Agreements, and the ongoing government enforcement to ensure all processes are compliant. It should come as no surprise that there are still a great deal of questions surrounding the section 301 tariffs, especially as it relates to how companies can avoid them.
For instance: I’ve heard about the 301 exclusions, but do they apply to me? What if I did not apply for the exclusions, can I still utilize them? I’ve heard moving sources can be an option, but is that really feasible?
Rest assured, BDP International is here to help. Let's discuss what actions you can take now to make sure that we understand all costs and cost avoidances in the supply chain.
For starters, know that all exclusions are HTS based and you need to make sure that your business is using this number today for your imports. Once the exclusion has been accepted, the United States Trade Representative (USTR) will post the description of the item along with the HTS in a Federal Register Notice (FRN) as well on their website.
This information is available to all importers, therefore, it's important to make sure that you review the current lists List I and the start of List II) to see if you can take advantage of the exclusion.
List II exclusions are just starting to be listed in the federal register, so I recommend staying current with the list as new ones appear regularly.
The USTR has created some helpful and informative tools that can assist you in checking on your HTS number. The search will let you know in which list (I,II, or III) the HTS number appears and whether you have the opportunity (time) to then apply for the exclusion. The exclusion process is also automated, allowing you to file your product(s) electronically online. When completing the application online, please fill out all details that are requested, as missing some of the elements will result in a rejection.
Lastly, some important points to know about the exclusion process:
- If granted the exclusion, you are permitted to go back to the designated period (by list) and request refunds
- Exclusions are given a one-year time period, which means you will need to apply again when the designated year is over
- You must use 2019 HTS numbers in all requests and research
Should you need any assistance with the research of your HTS number or with applying for an exclusion, please feel free to contact me directly.
One final note: if the exclusion is not granted for your application at this time there is no recourse to reapply.