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Resource

Section 232: Exclusions and Absolute Quota

EXCLUSION implications under the Proclamation

On May 18, 2018 and May 21, 2018, U.S. Customs and Border Protection (CBP) issued Cargo Systems Messaging Service (CSMS) notices #18-000349 and #18-000352, respectively. The messages state that on June 1, 2018 there will be Automated Commercial Environment (ACE) functionality deployed to permit importers and filers to submit entries for any approved exclusions and therefore not pay the otherwise applicable Section 232 duties.

To ensure approved exclusions are reflected on entries, importers will need to provide their broker with the following data:

  • Approved product part number/SKU and country of origin
  • Approved docket number
  • Harmonized Tariff System number
  • Effective date

We recommend that importers indicate the exclusion on their commercial invoice, as well as be prepared to provide the supporting exclusion evidence to CBP, upon request.

Additional information on the exclusion process, including how an importer can request an exclusion, can be found on Livingston’s website under Trade News.

QUOTA Implications under the Proclamation

As an importer of steel mill or aluminum articles subject to absolute quota, we want to make sure you are aware of how the absolute quota process may impact your current processes and limit importations of your product.

Currently, only steel from South Korea is subject to an absolute quota. It’s possible that, on June 1, 2018, many more countries will be subject to absolute quota for both steel and aluminum.

Absolute quotas, issued by Presidential Proclamation under Section 232 of the Trade Expansion Act of 1962, are applied based on the country of origin of the steel mill or aluminum article. The country of export does not determine Section 232 quota applicability. Absolute quota strictly limits the quantity of goods that may enter the commerce of the United States for a specific period.

Once the absolute quota amount is filled, no additional importations are allowed into the U.S. for consumption. Goods entered in excess of the absolute quota may be subject to redelivery.

Therefore, as an importer of an article subject to absolute quota, you must carefully review the current status of the allotted quota amount to minimize any impact to your clearance.

The following frequently asked questions and resources are provided to aid you in the understanding and determination of absolute quota.

What products are covered by Section 232 and may be subject to absolute quota?

The below products are subject to the proclamations. As amendments are made to the proclamations, please review to determine current status of country of origins that are subject to the absolute quota for steel and aluminum.

‘Steel mill articles’ falling in the following six-digit Harmonized Tariff Schedule (HTS) classifications:

  • 7206.10 through 7216.50
  • 7216.99 through 7301.10
  • 7302.10, 7302.40 through 7302.90
  • 7304.10 through 7306.90

‘Aluminum articles’ falling in the following Harmonized Tariff Schedule (HTS) classifications:

  • Unwrought aluminum (HTS 7601)
  • Aluminum bars, rods, and profiles (HTS 7604)
  • Aluminum wire (HTS 7605)
  • Aluminum plate, sheet, strip, and foil (flat rolled products) (HTS 7606 and 7607)
  • Aluminum tubes and pipes and tube and pipe fitting (HTS 7608 and 7609)
  • Aluminum castings and forgings (HTS 7616.99.51.60 and 7616.99.51.70
Definitions you should know:

Absolute Quota: A control on the quantity or amount (volume) of a commodity that may be imported into the United States during a specified period of time. Absolute quota strictly limit the quantity of goods that may enter the commerce of the United States for a specific period. Once the quote amount is filled, no additional importations are allowed into the U.S. for consumption. Quantities entered in excess of the quota must either be entered into a bonded warehoused or foreign trade zone (FTZ) to await a quota re-opening; be exported; or be destroyed under CBP supervision.
Absolute quota may limit the amount entered from a country (geographic quotas), or may be a global quota with limit by total quantity entered from all countries.

Quota status: Is the standing which entitles quota-class merchandise to admission under an absolute quota.

How can I determine if a quota is near filling, or check the quota status for an article prior to importing?

CBP maintains a weekly updated list of the quota status on their website at https://www.cbp.gov/document/report/quota-status-reports. It is usually updated each Monday, for the previous week. As the quota threshold nears, you may want to contact your Livingston Service Team to get an up-to-date quota status.

Is there a difference when entering at the northern or southern border, as opposed to an air, vessel, warehouse or FTZ entry?

Yes, when steel or aluminum articles are imported by truck or rail at the border (northern or southern) CBP will provide a conditional release of the merchandise, awaiting CBP Quota Headquarters release of a quota status indicator. This may cause issues, especially when a quota is near filling, as the goods have already left the border, and moved on toward destination.

The goods must be held intact, until a quota status of ‘Quota Accepted’ is received. Thus, the goods may not enter into the commerce of the U.S. (i.e. be distributed), but be held in the condition received pending this status notification.

If the quota is filled, a Quota Rejected message may be received. CBP will then ask for re-delivery so the goods may be exported or destroyed under CBP supervision, or be entered into a bonded warehouse or FTZ.

What is Livingston doing to assist you in knowing the release status for each of your quota entries?

We will be creating an eVent message that may be delivered to your email on the quota status of each entry. Once you receive a ‘Quota Accepted’ status for all tariff lines subject to an absolute quota, you will be able to distribute the goods or remove them from being held intact.

If you are not already set up with eVent messaging, please contact your Client Service Manager or Internal Service Coordinator to make arrangements.

What additional resources are available on quota?

CBP has published specific information on Section 232 Tariffs on Aluminum and Steel found here. As well as CBP’s weekly quota status listing, they have provided valuable information on quota enforcement and administration.