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Steel and Aluminum Tariff Exclusion Process Criticized as BIS Chief Leaves

Tuesday, April 24, 2018
Sandler, Travis & Rosenberg Trade Report

The White House announced April 20 that Mira Ricardel, who has led the Department of Commerce’s Bureau of Industry and Security since last August, will be leaving that post to become deputy national security advisor. The departure comes as BIS is under mounting pressure to handle the voluminous amount of product-specific exclusions companies are seeking from the additional tariffs President Trump imposed on imports of steel and aluminum products as of March 23.

In an April 19 letter, Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Ore., urged the DOC to make improvements to the exclusion request process, which they said has so far lacked “basic due process and procedural fairness for stakeholders” as well as “appropriate mechanisms” to ensure the process is not “abused for anticompetitive purposes.” For example, the letter said, the forms for requesting exclusions collect information on more than 70 attributes of each product and an additional form is apparently required whenever a single attribute differs between products. This process “increases the burden on businesses that purchase or produce products with even minor variations,” the letter said, and “appears to bar small businesses from relying on trade associations to consolidate product information and make submissions on behalf of multiple businesses.”

The letter also highlighted a lack of information on issues such as (1) the circumstances in which BIS will approve the broader application of a product-based exclusion to additional importers or how importers may request such an exclusion, (2) a clear process for protecting business proprietary information, (3) how BIS intends to address purchasers and producers of customized articles for which the required information may be unavailable until the article has been purchased, (4) whether and how BIS will inform petitioners and objectors that it has issued a determination, and (5) whether and how BIS intends to ensure it issues consistent determinations across similarly-situated petitioners and objectors. 

The senators urged Commerce Secretary Wilbur Ross to make improvements in these areas “as soon as practicable” and to provide an update within two weeks on his progress in addressing their concerns.

Press reports indicate that one of the primary complaints about the exclusion request process is how long it takes. When the process was announced BIS said reviews would normally not exceed 90 days, but the letter noted that as of April 18 BIS had posted for comment fewer than 100 of the more than 3,800 requests received so far. Since the date a request is posted for public comment is the date back to which any exclusion granted will be retroactive, the letter said the “significant delays” in posting these requests “risk serious and permanent financial harm to many petitioners that, even in DOC’s judgment, should not be subject to the Section 232 tariffs.”

It is unclear what effect the departure of BIS chief Mira Ricardel may have on these delays. Ricardel, a former official in the departments of Defense, Commerce, and State as well as a senior defense industry executive, was named April 19 as deputy to National Security Advisor John Bolton. Bolton cited her expertise in “national security matters related to our alliances, defense posture, technology security, foreign security assistance, and arms control” among the reasons for his choice.

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