83 FR 47236 - Procedures To Consider Requests for Exclusion of Particular Products From the Additional Action Pursuant to Section 301: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

Federal Register Volume 83, Issue 181 (September 18, 2018)

In a notice published on August 16, 2018 (83 FR 40823), the U.S. Trade Representative (Trade Representative) determined to take an additional action in the Section 301 investigation of China's acts, policies, and practices related to technology transfer, intellectual property, and innovation. The August 16 notice also announced that the Trade Representative would establish a process by which U.S. stakeholders may request that particular products classified within a tariff subheading covered by the additional action be excluded from the additional duties. This notice sets out the specific procedures and criteria related to requests for product exclusions, and opens up a docket for the receipt of exclusion requests.

[Federal Register Volume 83, Number 181 (Tuesday, September 18, 2018)]
[Notices]
[Pages 47236-47238]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-20246]


=======================================================================
-----------------------------------------------------------------------

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket Number USTR-2018-0032]


Procedures To Consider Requests for Exclusion of Particular 
Products From the Additional Action Pursuant to Section 301: China's 
Acts, Policies, and Practices Related to Technology Transfer, 
Intellectual Property, and Innovation

AGENCY: Office of the United States Trade Representative.

ACTION: Notice and request for comments.

-----------------------------------------------------------------------

SUMMARY: In a notice published on August 16, 2018 (83 FR 40823), the 
U.S. Trade Representative (Trade Representative) determined to take an 
additional action in the Section 301 investigation of China's acts, 
policies, and practices related to technology transfer, intellectual 
property, and innovation. The August 16 notice also announced that the 
Trade Representative would establish a process by which U.S. 
stakeholders may request that particular products classified within a 
tariff subheading covered by the additional action be excluded from the 
additional duties. This notice sets out the specific procedures and 
criteria related to requests for product exclusions, and opens up a 
docket for the receipt of exclusion requests.

DATES: USTR must receive all requests to exclude a particular product 
by December 18, 2018. Responses to a request for exclusion of a 
particular product are due 14 days after the request is posted in 
docket number USTR-2018-0032 on www.regulations.gov. Any replies to 
responses to an exclusion request are due the later of 7 days after the 
close of the 14 day response period, or 7 days after the posting of a 
response.

ADDRESSES: USTR strongly prefers electronic submissions made through 
the Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting requests for exclusion, responses to 
requests, and replies to responses in section B below. The docket 
number is USTR-2018-0032.

FOR FURTHER INFORMATION CONTACT: For questions about the product 
exclusion process, contact Assistant General Counsels Megan Grimball or 
Philip Butler, or Director of Industrial Goods Justin Hoffmann at (202) 
395-5725. For questions on customs classification or implementation of 
additional duties, contact [email protected].

SUPPLEMENTARY INFORMATION:

A. Background

    On August 18, 2017, the Office of the U.S. Trade Representative 
(USTR) initiated an investigation into certain acts, policies, and 
practices of the Government of China related to technology transfer, 
intellectual property, and innovation (82 FR 40213).
    In a notice published on April 6, 2018 (83 FR 14906), the Trade 
Representative announced a determination that the acts, policies, and 
practices of the Government of China covered in the investigation are 
unreasonable or discriminatory and burden or restrict U.S. commerce. 
The April 6 notice also invited public comment on a proposed action in 
the investigation, in the form of an additional 25 percent ad valorem 
duty on products from China classified in a list of 1,333 tariff 
subheadings, with an annual trade value of approximately $50 billion.
    After review, the Trade Representative determined to take an 
initial action in the investigation, and to consider an additional 
proposed action. See 83 FR 28710 (June 20, 2018). The Trade 
Representative narrowed the proposed list in the April 6 notice to 818 
tariff subheadings, with an approximate annual trade value of $34 
billion. This initial action became effective on July 6, 2018. The 
additional proposed action was an additional ad valorem duty of 25 
percent on products of China classified in 284 tariff subheadings, with 
an annual trade value of approximately $16 billion, as set forth in 
Annex C to the June 20 notice.
    After review, the Trade Representative determined to impose 
additional duties on 279 tariff subheadings, with an annual trade value 
of approximately $16 billion. See 83 FR 40823 (August 16, 2018). The 
additional duties on these products took effect on August 23, 2018.
    During the notice and comment process, a number of interested 
persons asserted that specific products within a particular tariff 
subheading only were available from China, that the imposition of 
additional duties on the specific products would cause severe economic 
harm to a U.S. interest, and that the specific products were not 
strategically important or related to the ``Made in China 2025'' 
program. In light of such concerns, the Trade Representative determined 
to establish a process by which U.S. stakeholders may request that 
particular products classified within a covered HTSUS subheading be 
excluded from the additional action. That process is set out in the 
remainder of this notice.

B. Procedures To Request the Exclusion of Particular Products

    USTR invites interested persons, including trade associations, to 
submit requests for exclusion from the additional duties of a 
particular product classified within an HTSUS subheading set out in 
Annex A of the notice published at 83 FR 40823 (August 16, 2018). As 
explained in more detail below, each request specifically must identify 
a particular product, and provide supporting data and the rationale for 
the requested exclusion. USTR will evaluate each request on a case-by-
case basis, taking into account whether the exclusion would undermine 
the objective of the Section 301 investigation. Any exclusion will be 
effective starting from the August 23, 2018 effective date of the 
additional duties, and extending for one year after the publication of 
the exclusion determination in the Federal Register. In other words, an 
exclusion, if granted, will apply retroactively to the August 23 date 
of the imposition of the additional duties. USTR will periodically 
announce decisions on pending requests.

1. Requests for Exclusion of Particular Products

    With regard to product identification, any request for exclusion 
must include the following information:
     Identification of the particular product in terms of the 
physical characteristics (e.g., dimensions, material composition, or 
other characteristics) that distinguish it from other products within 
the covered 8-digit subheading. USTR will not consider requests that 
identify the product at issue in terms of the identity

[[Page 47237]]

of the producer, importer, ultimate consumer, actual use or chief use, 
or trademarks or tradenames. USTR will not consider requests that 
identify the product using criteria that cannot be made available to 
the public.
     The 10-digit subheading of the HTSUS applicable to the 
particular product requested for exclusion.
     Requesters also may submit information on the ability of 
U.S. Customs and Border Protection to administer the exclusion.
    Requesters must provide the annual quantity and value of the 
Chinese-origin product that the requester purchased in each of the last 
three years. For trade association requesters, please provide such 
information based on your members' data. If precise annual quantity and 
value information are not available, please provide an estimate and 
explain the basis for the estimation.
    For imports sold as final products, requesters must provide the 
percentage of their total gross sales in 2017 that sales of the 
Chinese-origin product accounted for.
    For imports used in the production of final products, requesters 
must provide the percentage of the total cost of producing the final 
product(s) the Chinese-origin input accounts for and the percentage of 
their total gross sales in 2017 that sales of the final product(s) 
accounted for.
    With regard to the rationale for the requested exclusion, each 
request for exclusion should address the following factors:
     Whether the particular product is available only from 
China. In addressing this factor, requesters should address 
specifically whether the particular product and/or a comparable product 
is available from sources in the United States and/or in third 
countries.
     Whether the imposition of additional duties on the 
particular product would cause severe economic harm to the requester or 
other U.S. interests.
     Whether the particular product is strategically important 
or related to ``Made in China 2025'' or other Chinese industrial 
programs.
    In addressing each factor, the requester should provide support for 
their assertions. Requesters also may provide any other information or 
data that they consider relevant to an evaluation of the request.
    Any request that contains business confidential information must be 
accompanied by a public version. The public version will be posted on 
regulations.gov.

2. Responses to Requests for Exclusions

    After a request for exclusion of a particular product is posted on 
docket number USTR 2018-0032, interested persons will have 14 days to 
respond to the request, indicating support or opposition and providing 
reasons for their view. All responses must clearly identify the 
specific request for exclusion being addressed. You can view requests 
for exclusions on www.regulations.gov by entering docket number USTR-
2018-0032 in the search field on the home page.

3. Replies to Responses to Requests for Exclusions

    After a response is posted on docket number USTR 2018-0032, 
interested persons will have the opportunity to reply to the response. 
Any reply must be posted within the later of 7 days after the close of 
the 14 day response period, or 7 days after the posting of a response. 
All replies must clearly identify the specific responses being 
addressed.

4. Submission Instructions

    As noted above, interested persons must submit requests for 
exclusions by December 18, 2018. Any responses to those requests must 
be submitted within 14 days after the requests are posted. Any reply to 
a response must be submitted within the later of 7 days after the close 
of the 14 day response period, or 7 days after the posting of a 
response. Interested persons seeking to exclude two or more products 
must submit a separate request for each product, i.e., one product per 
request.
    All submissions must include a statement that the submitter 
certifies that the information provided is complete and correct to the 
best of his or her knowledge.
    To assist in review of requests for exclusion, USTR has prepared a 
request form that will be posted on the USTR website under 
`Enforcement/Section 301 investigations' and on the www.regulations.gov 
docket in the `supporting documents' section. USTR strongly encourages 
interested persons to use the form to submit requests, though use of 
the form is not required. All submissions must be in English and sent 
electronically via www.regulations.gov.

5. To Submit a Product Exclusion Request

    To submit requests via www.regulations.gov, enter document ID 
number USTR-2018-0032 on the home page and click `search.' The site 
will provide a search-results page listing the Federal Register notice 
associated with this docket. Find a reference to this notice and click 
on the link titled `comment now!'. Once posted on the electronic 
docket, the exclusion request will be viewable in the `primary 
documents' section.
    File names for requests for exclusions must include the 10-digit 
subheading of the HTSUS applicable to the particular product and the 
name of the person or entity submitting the request (e.g., 1234567890 
Initech). If the request includes business confidential information, 
then two files must be submitted--the business confidential version and 
a public version. The file names must indicate the version, e.g., 
1234567890 Initech BC and 1234567890 Initech P. Additional instructions 
on business confidential submissions can be found below in Section B.8 
of this notice.

6. To Submit a Response to a Product Exclusion Request

    To respond to a request for exclusion, please find the request in 
the `primary documents' section of the docket and click on the link 
titled `comment now!' associated with that specific request. Responses 
made on requests for exclusion will appear in the `comments' section of 
the docket.
    File names for responses to requests should include the document ID 
of the request and the name of the person or entity submitting the 
response (e.g., USTR-2018-0032-0005 Initrode). If the response includes 
business confidential information, then two files must be submitted--
the business confidential information version and a public version. The 
file names should indicate the version, e.g., USTR-2018-0032-0005 
Initrode BC and USTR-2018-0032-0005 Initrode P.

7. To Submit a Reply to a Response on a Product Exclusion Request

    To reply to a response made to an exclusion request, please find 
the exclusion request that is the subject of the response in the 
`primary documents' section of the docket and click on the link titled 
`comment now!'. Replies will appear in the `comments' section of the 
docket.
    File names for replies should include the document ID of the 
response and the name of the person or entity submitting the reply 
(e.g., USTR-2018-0032-0020 Initech). If the reply includes business 
confidential information, then two files must be submitted--the 
business confidential information version and a public version. The 
file names must indicate the version, e.g., USTR-2018-0032-0020 Initech 
BC and USTR-2018-0032-0020 Initech P.

[[Page 47238]]

    For further information on using the www.regulations.gov website, 
please consult the resources provided on the website by clicking on 
`How to Use Regulations.gov' on the bottom of the home page.

8. Document Format Instructions

    Submit requests for product exclusions in an attached document. 
Type `see attached' in the `comment' field. USTR prefers submissions 
made using the request form that will be posted on the USTR website 
under `Enforcement/Section 301 investigations' and on the 
www.regulations.gov docket in the `supporting documents' section and 
saved as a searchable Adobe Acrobat (.pdf) document. If you do not use 
the USTR form, USTR prefers submissions made in Microsoft Word (.doc) 
or searchable Adobe Acrobat (.pdf). If you use an application other 
than those two, please indicate the name of the application in the 
`comment' field.
    Please do not attach separate cover letters to electronic 
submissions; rather, include any information that might appear in a 
cover letter in the comments themselves. Similarly, to the extent 
possible, please include any exhibits, annexes, or other attachments in 
the same file as the comment itself, rather than submitting them as 
separate files.
    For any documents submitted electronically containing business 
confidential information, the file name of the business confidential 
version must end with the characters `BC'. Any page containing business 
confidential information must be clearly marked `BUSINESS CONFIDENTIAL' 
on the top of that page and the submission should clearly indicate, via 
brackets, highlighting, or other means, the specific information that 
is business confidential. If you request business confidential 
treatment, you must certify in writing that disclosure of the 
information would endanger trade secrets or profitability, and that the 
information would not customarily be released to the public. Filers of 
submissions containing business confidential information also must 
submit a public version of their submissions. The file name of the 
public version must end with the character `P'. The `BC' and `P' should 
follow the rest of the file name. If these procedures are not 
sufficient to protect business confidential information or otherwise 
protect business interests, please contact the USTR Section 301 line at 
(202) 395-5725 to discuss whether alternative arrangements are 
possible.
    USTR will post submissions in the docket for public inspection, 
except business confidential information. You can view submissions on 
the https://www.regulations.gov website by entering docket number USTR-
2018-0032 in the search field on the home page.

Robert E. Lighthizer,
United States Trade Representative.
[FR Doc. 2018-20246 Filed 9-17-18; 8:45 am]
BILLING CODE 3290-F8-P