Secondary Tariffs on Russian Oil Customers Bill Clears Congress, is Signed
The final congressional hurdle for Lindsey Graham’s Sanctioning Russia and Iran Act has been cleared. A vote of 262-159 in the House of Representatives on Wednesday, September 16, sent the bill on to the desk of President Trump who signed the bill on September 18.
The bill turned law gives the president the ability to impose 100% tariffs on 15 countries for the purchase of either Russian oil or natural gas and the top five biggest helpers of Russia’s avoidance of sanctions. The law also directs the president to impose 500% tariffs on Russian products except uranium for nuclear power plants and medical isotopes. The additional tariffs will stack on top of any existing Section 301 or 232 tariffs, safeguards, or other trade remedies.
The law does offer a method of reducing the tariffs in response to a country’s increased or decreased purchases, though the rate cannot be lowered to zero. Should the president propose dropping a duty or ending a sanction, Congress has 30 days to consider a joint resolution of disapproval. If a joint resolution doesn’t become law in 30 days, the change can be made.
Now that the bill has been signed into law, focus will turn to implementation. Within 30 days of implementation the Treasury Department is to begin imposing mandatory sanctions on Russian banks and foreign banks doing business with them. The president is also required to impose tariffs on buyers of Russian oil and gas.
Brokers Expected to Act as IOR for Entry Type 13
In a call held by CBP ahead of the pilot for entry type 13, CBP stated that, due to the Post Office lacking the right to make entry, customs brokers will be expected to be the importer of record. And while it is true that customs brokers have long had the ability to act as the IOR for entries, it is not something that is often undertaken due to the legal and financial risk associated with doing so.
Due to this development, Carmichael International Service will not be soliciting or accepting requests to file postal entries.
Guide to Importing Commercial Goods into Canada Published by CBSA
Our clients who have a presence in Canada should be aware of the latest version of the Guide to Importing Commercial Goods into Canada that was recently published by the Canada Border Services Agency. This resource is designed to help businesses navigate the Canadian import process by providing basic details to importers and customs brokers for proper clearance and release of goods as well as proper calculation of duties, taxes, and fees. If you already import into Canada or are considering doing so, we encourage you to make use of this helpful resource.
Reminder: Section 232 for Pharmaceuticals Takes Effect for All Companies September 29
As a reminder, the second wave of implementation for the Section 232 pharmaceutical tariffs takes effect on September 29. The first wave required all importers to report a chapter 99 tariff regardless of their presence on the Annex III list of companies for which duty was due. For those importers who were not on Annex III, shipments of patented pharmaceuticals and ingredients were to be reported under 9903.04.61. As of September 29, however, importers not on the Annex III list will now have to report the appropriate dutiable tariff unless another exemption applies.
The Commerce Department’s Bureau of Industry and Security (BIS) has also recently provided, via Federal Register Notice, guidance and procedures for implementing the adjustments possible for specialty pharmaceuticals and their associated ingredients. This notice also contains technical corrections to the HTSUS for the Section 232 pharmaceutical duties.
The guidance states that these tariff adjustments become effective on September 29 and lists the impacted HTS numbers and countries in Annex I and II of the Federal Register notice. The pharmaceutical products subject to these adjustments include drugs and associated ingredients where all approved indications are designated as orphan; nuclear medicines; plasma derived therapies; fertility drugs; cell therapy products; gene therapy products; antibody drug conjugates; medical countermeasures related to chemical, biological, radiological, and nuclear threats; and animal health. A 0% duty rate will apply if they are products of a jurisdiction that has a current or forthcoming trade agreement with the U.S. or if they meet an urgent U.S. health need. Approval from Commerce is required for pharmaceuticals that meet an urgent U.S. health need. Details of the approval process are listed in the Federal Register.
Five technical corrections to Annex I of presidential Proclamation 11020 and one technical correction to Annex IV is also detailed in the notice. Of the changes, the most significant appears to be the inclusion of a new chapter 99 heading (9903.04.70) with an ad valorem duty rate of zero for pharmaceutical products and associated ingredients intended for clinical trials, research and development, or other non-commercial applications.
CBP Releases Guidance on Updates to Section 301 China Exclusions
On September 2 the Office of the U.S. Trade Representative (USTR) published a Federal Register notice that updated the Section 301 China Exclusions to include statistical changes made during the 484(f) updates that went into effect on July 1 of this year. On September 2, CBP released guidance in the form of a CSMS message regarding these updates. As of 12:00 PM ET on September 23, these updates will be live in ACE and importers who were previously unable to claim the Section 301 CN exemption under 9903.88.69 will now be able to do so.
If you have entries where the Section 301 exclusion should have been applicable, please reach out to your Carmichael representative to ensure these are corrected. Entries that have not yet been paid in may be corrected and retransmitted. For entries that have been paid but have not been liquidated, a PSC may be transmitted to request refund of the additional duties. For entries that have liquidated, a protest may be filed up to 180 days after liquidation.
The HTS numbers that were included in this update are 3926.90.9915, 3926.90.9920, 8413.91.9039, 8413.91.9046, 8413.91.9059, 8413.91.9099.
Guidance for Import Ban of Certain Polysilicon Products Published by Commerce Department
On Thursday, September 24, a Federal Register notice will be published by the Commerce Department announcing a temporary final rule that will be used to monitor existing companies for evidence of stockpiling polysilicon and polysilicon derivatives in advance of the Section 232 duties on these products that take effect on December 3.
The goal of this TFR is to watch for Importers of Record importing volumes of polysilicon products substantially greater than their historic average or to ensure that new IORs are not exceeding the applicable weekly limits for polysilicon products. If an IOR is found to be in violation of these stockpiling requirements, they will not be allowed to make entry on further polysilicon products until after the duties take effect. Goods can be stored in a bonded warehouse, but they may not enter for consumption before December 4.
IORs may apply for a waiver of this prohibition.