Notice of Product Exclusions: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 21389-21391 [2019-09872]

Agencies

• Office of the United States Trade Representative

[Federal Register Volume 84, Number 93 (Tuesday, May 14, 2019)]
[Notices]
[Pages 21389-21391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09872]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Notice of Product Exclusions: China's Acts, Policies, and 
Practices Related to Technology Transfer, Intellectual Property, and 
Innovation

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of product exclusions.

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SUMMARY: Effective July 6, 2018, the U.S. Trade Representative (Trade 
Representative) imposed additional duties on goods of China with an 
annual trade value of approximately $34 billion (the $34 billion 
action) as part of the action in the Section 301 investigation of 
China's acts, policies, and practices related to technology transfer, 
intellectual property, and innovation. The Trade Representative's 
determination included a decision to establish a product exclusion 
process. The Trade Representative initiated the exclusion process in 
July 2018, and stakeholders have submitted requests for the exclusion 
of specific products. The Trade Representative granted exclusion 
requests in December 2018, March 2019, and April 2019. This notice 
announces the Trade Representative's determination to grant additional 
exclusion requests, as specified in the Annex to this notice. The Trade 
Representative will continue to issue decisions on pending requests on 
a periodic basis.

DATES: The product exclusions announced in this notice will apply as of 
the July 6, 2018 effective date of the $34 billion action, and will 
extend for one year after the publication of this notice. U.S. Customs 
and Border Protection will issue instructions on entry guidance and 
implementation.

FOR FURTHER INFORMATION CONTACT: For general questions about this 
notice, contact Assistant General Counsels Philip Butler or Megan 
Grimball, or Director of Industrial Goods Justin Hoffmann at (202) 395-
5725. For specific questions on customs classification or 
implementation of the product exclusions identified in the Annex to 
this notice, contact [email protected].

SUPPLEMENTARY INFORMATION: 

A. Background

    For background on the proceedings in this investigation, please see 
the prior notices issued in the investigation, including 82 FR 40213 
(August 24, 2017), 83 FR 14906 (April 6, 2018), 83 FR 28710 (June 20, 
2018), 83 FR 33608 (July 17, 2018), 83 FR 38760 (August 7, 2018), 83 FR 
40823 (August 16, 2018), 83 FR 47974 (September 21, 2018), 83 FR 65198 
(December 19, 2018), 83 FR 67463 (December 28, 2018), 84 FR 7966 (March 
5, 2019), 84 FR 11152 (March 25, 2019), and 84 FR 16310 (April 18, 
2019).
    Effective July 6, 2018, the Trade Representative imposed additional 
25 percent duties on goods of China classified in 818 8-digit 
subheadings of the Harmonized Tariff Schedule of the United States 
(HTSUS), with an approximate annual trade value of $34 billion. See 83 
FR 28710. The Trade Representative's determination included a decision 
to establish a process by which U.S. stakeholders may request exclusion 
of particular products classified within an 8-digit HTSUS subheading 
covered by the $34 billion action from the additional duties. The Trade 
Representative issued a notice setting out the process for the product 
exclusions, and opened a public docket. See 83 FR 32181 (the July 11 
notice).
    Under the July 11 notice, requests for exclusion had to identify 
the product subject to the request in terms of the

[[Page 21390]]

physical characteristics that distinguish the product from other 
products within the relevant 8-digit subheading covered by the $34 
billion action. Requestors also had to provide the 10-digit subheading 
of the HTSUS most applicable to the particular product requested for 
exclusion, and could submit information on the ability of U.S. Customs 
and Border Protection to administer the requested exclusion. Requestors 
were asked to provide the quantity and value of the Chinese-origin 
product that the requestor purchased in the last three years. With 
regard to the rationale for the requested exclusion, requests had to 
address the following factors:
     Whether the particular product is available only from 
China and specifically whether the particular product and/or a 
comparable product is available from sources in the United States and/
or third countries.
     Whether the imposition of additional duties on the 
particular product would cause severe economic harm to the requestor or 
other U.S. interests.
     Whether the particular product is strategically important 
or related to ``Made in China 2025'' or other Chinese industrial 
programs.
    The July 11 notice stated that the Trade Representative would take 
into account whether an exclusion would undermine the objective of the 
Section 301 investigation.
    The July 11 notice required submission of requests for exclusion 
from the $34 billion action no later than October 9, 2018, and noted 
that the Trade Representative would periodically announce decisions. In 
December 2018, the Trade Representative granted an initial set of 
exclusion requests. See 83 FR 67463. The Trade Representative granted a 
second and third set of exclusions in March 2019 and April 2019. See 84 
FR 11152 and 84 FR 16310. The Office of the United States Trade 
Representative regularly updates the status of each pending request at 
https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-china/section-301-exclusion-process.

B. Determination To Grant Certain Exclusions

    Based on the evaluation of the factors set out in the July 11 
notice, which are summarized above, pursuant to sections 301(b), 
301(c), and 307(a) of the Trade Act of 1974, as amended, and in 
accordance with the advice of the interagency Section 301 Committee, 
the Trade Representative has determined to grant the product exclusions 
set out in the Annex to this notice. The Trade Representative's 
determination also takes into account advice from advisory committees 
and any public comments on the pertinent exclusion requests.
    As set out in the Annex to this notice, the exclusions are 
established in two different formats: (1) As an exclusion for an 
existing 10-digit subheading from within an 8-digit subheading covered 
by the $34 billion action, or (2) as an exclusion reflected in 
specially prepared product descriptions. In particular, the exclusions 
take the form of five 10-digit HTSUS subheadings, and 35 specially 
prepared product descriptions.
    In accordance with the July 11 notice, the exclusions are available 
for any product that meets the description in the Annex, regardless of 
whether the importer filed an exclusion request. Further, the scope of 
each exclusion is governed by the scope of the product descriptions in 
the Annex to this notice, and not by the product descriptions set out 
in any particular request for exclusion.
    The exclusions in the Annex cover approximately 515 separate 
exclusion requests: the excluded 10-digit subheadings cover 86 separate 
requests, and the 35 specially prepared product descriptions cover 
approximately 429 separate requests.
    Paragraph A, subparagraphs (3)-(5) are conforming amendments to the 
HTSUS reflecting the modification made by the Annex to this notice.
    As stated in the July 11 notice, the exclusions will apply as of 
the July 6, 2018 effective date of the $34 billion action, and extend 
for one year after the publication of this notice. U.S. Customs and 
Border Protection will issue instructions on entry guidance and 
implementation.
    The Trade Representative will continue to issue determinations on 
pending requests on a periodic basis.

Joseph Barloon,
General Counsel, Office of the U.S. Trade Representative.

ANNEX

    A. Effective with respect to goods entered for consumption, or 
withdrawn from warehouse for consumption, on or after 12:01 a.m. 
eastern daylight time on July 6, 2018, subchapter III of chapter 99 
of the Harmonized Tariff Schedule of the United States (HTSUS) is 
modified:
    1. By inserting the following new heading 9903.88.08 in 
numerical sequence, with the material in the new heading inserted in 
the columns of the HTSUS labeled ``Heading/Subheading'', ``Article 
Description'', and ``Rates of Duty 1-General'', respectively:

----------------------------------------------------------------------------------------------------------------
                                                                                 Rates of duty
                                                             ---------------------------------------------------
     Heading/ subheading            Article description                         1
                                                             ---------------------------------------      2
                                                                       General            Special
----------------------------------------------------------------------------------------------------------------
``9903.88.08.................  Articles the product of        The duty provided in the
                                China, as provided for in      applicable
                                U.S. note 20(k) to this        subheading.''
                                subchapter, each covered by
                                an exclusion granted by the
                                U.S. Trade Representative.
----------------------------------------------------------------------------------------------------------------

    2. by inserting the following new U.S. note 20(k) to subchapter III 
of chapter 99 in numerical sequence:
    ``(k) The U.S. Trade Representative determined to establish a 
process by which particular products classified in heading 9903.88.01 
and provided for in U.S. notes 20(a) and 20(b) to this subchapter could 
be excluded from the additional duties imposed by heading 9903.88.01. 
See 83 FR 28710 (June 20, 2018) and 83 FR 32181 (July 11, 2018). 
Pursuant to the product exclusion process, the U.S. Trade 
Representative has determined that the additional duties provided for 
in heading 9903.88.01 shall not apply to the following particular 
products, which are provided for in the enumerated statistical 
reporting numbers:
(1) 8407.21.0040
(2) 8427.10.4000
(3) 8473.40.1000
(4) 8481.10.0090
(5) 8483.50.9040
(6) Apparatus, including pitchers, bottles, and units designed for 
incorporation into refrigerators, appliances or sink faucets, the 
foregoing fitted with filters for filtering or purifying water 
(described in statistical reporting number 8421.21.0000)
(7) Filtering apparatus, fitted with pumps, designed for use in 
pools, spas or similar contained bodies of water (described in 
statistical reporting number

[[Page 21391]]

8421.21.0000)
(8) Filtering or purifying machinery or apparatus of a kind used for 
waste water treatment (described in statistical reporting number 
8421.21.0000)
(9) Submersible machinery for filtering water, designed for use in 
pools, basins, aquariums, spas or similar contained bodies of water 
(described in statistical reporting number 8421.21.0000)
(10) Water distillation machinery and apparatus not covered by 
heading 8419 (described in statistical reporting number 
8421.21.0000)
(11) Air purification equipment, electrically powered, weighing less 
than 36 kg (described in statistical reporting number 8421.39.8015)
(12) Dust collection equipment for cement, minerals and mining 
industries (described in statistical reporting number 8421.39.8015)
(13) Apron-type chain conveyor (described in statistical reporting 
number 8428.39.0000)
(14) Roller conveyors (described in statistical reporting number 
8428.39.0000)
(15) Vibrating conveyors (described in statistical reporting number 
8428.39.0000)
(16) Machinery for mixing beverages in single servings for direct 
human consumption, designed for use in commercial food service 
establishments (described in statistical reporting number 
8438.80.0000)
(17) Machinery for reconstituting single serving beverages for 
direct human consumption from frozen pre-packaged portions, designed 
for use in commercial food service establishments (described in 
statistical reporting number 8438.80.0000)
(18) Armatures designed for use in hydraulic solenoid valves 
(described in statistical reporting number 8481.90.9040)
(19) C-poles, of steel, designed for use in hydraulic solenoid 
control valves (described in statistical reporting number 
8481.90.9040)
(20) Housings designed for hydraulic ball valves, of cast iron or 
steel, each measuring 5.7 cm by 3.2 cm and weighing 0.528 kg 
(described in statistical reporting number 8481.90.9040)
(21) Metering spools, of aluminum, designed for use in hydraulic 
solenoid control valves (described in statistical reporting number 
8481.90.9040)
(22) Metering spools, of steel, designed for use in hydraulic 
solenoid control valves (described in statistical reporting number 
8481.90.9040)
(23) Poles, of steel, designed for use in hydraulic solenoid control 
valves (described in statistical reporting number 8481.90.9040)
(24) Push pins, of steel, designed for use in hydraulic solenoid 
control valves (described in statistical reporting number 
8481.90.9040)
(25) Retainers, of steel, designed for use in hydraulic solenoid 
control valves (described in statistical reporting number 
8481.90.9040)
(26) DC electric motors, of an output of less than 18.65 W, valued 
over $4, other than brushless (described in statistical reporting 
number 8501.10.4060)
(27) AC electric motors, multi-phase, of an output exceeding 14.92 
kW but not exceeding 75 kW, other than for use in civil aircraft 
(described in statistical reporting number 8501.52.8040)
(28) Coils, coil assemblies and other parts of electromagnets (the 
foregoing described in statistical reporting number 8505.90.7501)
(29) Radio remote control apparatus for garage doors (described in 
statistical reporting number 8526.92.5000)
(30) Radio remote control apparatus for pet collars and pet food 
dispensers (described in statistical reporting number 8526.92.5000)
(31) Remote control devices, hand held and battery powered, designed 
for use with toy model vehicles and aircraft (described in 
statistical reporting number 8526.92.5000)
(32) Bezels, covers and housings, the foregoing designed for motor 
vehicle cameras (described in statistical reporting number 
8529.90.8100)
(33) Electromechanical relays, for a voltage exceeding 60 V but not 
over 250 V, with contacts rated at 10 A or more (described in 
statistical reporting number 8536.49.0075)
(34) Push-button switches, rated at over 5 A, measuring no more than 
2.9 cm by 2.9 cm by 2.9 cm, with 4 spade or brass terminals, with an 
actuator shaft with D-shaped cross section (described in statistical 
reporting number 8536.50.9035)
(35) Push-button switches, rated at over 5 A, measuring no more than 
4.8 cm by 2.8 cm by 2.8 cm, with 2 spade or brass terminals 
(described in statistical reporting number 8536.50.9035)
(36) Push-button switches, rated at over 5 A, measuring no more than 
5 cm by 1.7 cm by 1.9 cm, with 2 spade or brass terminals, with an 
actuator shaft with D-shaped cross section (described in statistical 
reporting number 8536.50.9035)
(37) Snap-action switches, each designed for installation in a wall-
mounted enclosure or electrical box (described in statistical 
reporting number 8536.50.9040)
(38) Stereoscopic microscopes, not provided with a means for 
photographing the image, valued not over $500 per unit (described in 
statistical reporting number 9011.10.8000)
(39) Adapter rings, tubes and extension sleeves, stands and arm 
assemblies, stages and gliding tables, eyeguards and focusing racks, 
all the foregoing designed for use with compound optical microscopes 
(described in statistical reporting number 9011.90.0000)
(40) Ultraviolet or infrared LED light therapy devices for the 
professional treatment of pain or of ailments of the skin (described 
in statistical reporting number 9018.20.0040)

    3. by amending the last sentence of the first paragraph of U.S. 
note 20(a) to subchapter III of chapter 99 by:
    a. Deleting the word ``or'' where it appears after the phrase 
``U.S. note 20(i) to subchapter III of chapter 99;''; and
    b. inserting ``; or (4) heading 9903.88.08 and U.S. note 20(k) 
to subchapter III of chapter 99'' after the phrase ``U.S. note 20(j) 
to subchapter III of chapter 99'', where it appears at the end of 
the sentence.
    4. by amending the first sentence of U.S. note 20(b) to 
subchapter III of chapter 99 by:
    a. Deleting the word ``or'' where it appears after the phrase 
``U.S. note 20(i) to subchapter III of chapter 99;''; and
    b. inserting ``; or (4) heading 9903.88.08 and U.S. note 20(k) 
to subchapter III of chapter 99'' after the phrase ``U.S. note 20(j) 
to subchapter III of chapter 99'', where it appears at the end of 
the sentence.
    5. By amending the Article Description of heading 9903.88.01:
    a. By deleting ``9903.88.06 or'';
    b. by inserting in lieu thereof ``9903.88.06, ''; and
    c. By inserting ``or 9903.88.08,'' after ``9903.88.07,''.

[FR Doc. 2019-09872 Filed 5-13-19; 8:45 am]
 BILLING CODE 3290-F9-P