Notice of Product Exclusions and Amendments: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 52567-52579 [2019-21420]

Agencies

• Office of the United States Trade Representative

[Federal Register Volume 84, Number 191 (Wednesday, October 2, 2019)]
[Notices]
[Pages 52567-52579]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21420]



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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Notice of Product Exclusions and Amendments: 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 and amendments.

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SUMMARY: Effective July 6, 2018, the U.S. Trade Representative imposed 
additional duties on goods of China with an annual trade value of 
approximately $34 billion 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 U.S. 
Trade Representative's determination included a decision to establish a 
product exclusion process. The U.S. Trade Representative initiated the 
exclusion process in July 2018, and stakeholders have submitted 
requests for the exclusion of specific products. In December 2018, and 
March, April, May, June, July and September 2019, the U.S. Trade 
Representative granted exclusion requests. This notice announces the 
U.S. Trade Representative's determination to grant additional exclusion 
requests, as specified in the Annex to this notice. The U.S. Trade 
Representative will continue to issue decisions as necessary. This 
notice also corrects errors by removing certain notes in the Harmonized 
Tariff Schedule of the United States.

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 23, 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), 84 FR 16310 (April 18, 2019), 
84 FR 21389 (May 14, 2019), 84 FR 25895 (June 4, 2019), 84 FR 32821 
(July 9, 2019), and 84 FR 49564 (September 20, 2019).
    Effective July 6, 2018, the U.S. 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. ($34 billion action.) The U.S. 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 U.S. 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 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 U.S. 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 U.S. Trade Representative would periodically announce 
decisions. In December 2018, the U.S. Trade Representative granted an 
initial set of exclusion requests. See 83 FR 67463. The U.S. Trade 
Representative granted additional exclusions in March, April, May, 
June, July, and September 2019. See 84 FR 11152, 84 FR 16310, 84 FR 
21389, 84 FR 25895, 84 FR 32821, and 84 FR 49564. The Office of the 
U.S. Trade Representative regularly updates the status of each pending 
request and posts the status within the web pages for the respective 
tariff action they apply to at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions.

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 U.S. Trade Representative has determined to grant the product 
exclusions set out in the Annex to this notice. The U.S. 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 
reflected in 92 specially prepared product descriptions, which cover 
129 separate exclusion requests.
    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 10-digit HTSUS headings 
and product descriptions in the Annex to this notice, and not by the 
product descriptions set out in any particular request for exclusion.

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    Paragraph A, subparagraphs (3)-(5) are conforming amendments to the 
HTSUS reflecting the modification made by the Annex to this notice.
    Paragraphs B, C, D, and E of the Annex correct errors by removing 
U.S. notes 20(q)(115), 20(q)(132), 20(q)(133), and 20(q)(216) of 
subchapter III of chapter 99 of the HTSUS. These notes relate to HTS 
subheadings covered by other tariff actions, but they were placed in 
the annex to the notice published at 84 FR 49564 (September 20, 2019), 
which excluded products under HTS subheadings covered by the $34 
billion action.
    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 U.S. 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.
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[FR Doc. 2019-21420 Filed 10-1-19; 8:45 am]
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