Notice of Product Exclusions: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 27489-27505 [2020-09828]

Agencies

• Office of the United States Trade Representative

[Federal Register Volume 85, Number 90 (Friday, May 8, 2020)]
[Notices]
[Pages 27489-27505]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09828]


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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: In September 2018, the U.S. Trade Representative imposed 
additional duties on goods of China with an annual trade value of 
approximately $200 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 initiated a product exclusion process in June 
2019, and interested persons have submitted requests for the exclusion 
of specific products. This notice announces the U.S. Trade 
Representative's determination to grant certain exclusion requests, as 
specified in the Annex to this notice, and corrects technical errors in 
previously announced exclusions.

DATES: The product exclusions announced in this notice will apply as of 
September 24, 2018, the effective date of the $200 billion action, and 
extend to August 7, 2020. The amendments announced in this notice are 
retroactive to the date that the original exclusions were published.

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 
prior notices 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 47974 (September 21, 2018), 
83 FR 49153 (September 28, 2018), 83 FR 65198 (December 19, 2018), 84 
FR 7966 (March 5, 2019), 84 FR 20459 (May 9, 2019), 84 FR 29576 (June 
24, 2019), 84 FRN 38717 (August 7, 2019), 84 FR 46212 (September 3, 
2019), 84 FR 49591 (September 20, 2019), 84 FR 57803 (October 28, 
2019), 84 FR 61674 (November 13, 2019), 84 FR 65882 (November 29, 
2019), 84 FR 69012 (December 17, 2019), 85 FR 549 (January 6, 2020), 85 
FR 6674 (February 5, 2020), 85 FR 9921 (February 20, 2020), 85 FR 15015 
(March 16, 2020), 85 FR 17158 (March 26, 2020), and 85 FR 23122 (April 
24, 2020).
    Effective September 24, 2018, the U.S. Trade Representative imposed 
additional 10 percent ad valorem duties on goods of China classified in 
5,757 full and partial subheadings of the Harmonized Tariff Schedule of 
the United States (HTSUS), with an approximate annual trade value of 
$200 billion. See 83 FR 47974, as modified by 83 FR 49153. In May 2019, 
the U.S. Trade Representative increased the additional duty to 25 
percent. See 84 FR 20459. On June 24, 2019, the U.S. Trade 
Representative established a process by which stakeholders could 
request exclusion of particular products classified within an 8-digit 
HTSUS subheading covered by the $200 billion action from the additional 
duties. See 84 FR 29576 (the June 24 notice).
    Under the June 24 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 HTSUS subheading covered by the $200 billion 
action. Requestors also had to provide the 10-digit HTSUS subheading 
most applicable to the particular product requested for exclusion, and 
could submit information on the ability of U.S. Customs and Border 
Protection to

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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 June 24 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 June 24 notice required submission of requests for exclusion 
from the $200 billion action no later than September 30, 2019, and 
noted that the U.S. Trade Representative periodically would announce 
decisions. In August 2019, the U.S. Trade Representative granted an 
initial set of exclusion requests. See 84 FR 38717. The U.S. Trade 
Representative granted additional exclusions in September, October, 
November and December 2019, and in January, February, March and April 
2020. See 84 FR 49591, 84 FR 57803, 84 FR 61674, 84 FR 65882, 84 FR 
69012, 85 FR 549, 85 FR 6674, 85 FR 9921, 85 FR 15015, 85 FR 17158, and 
85 FR 23122. The Office of the United States Trade Representative 
(USTR) regularly updates the status of each pending request on the 
Exclusions Portal at https://exclusions.ustr.gov/s/docket?docketNumber=USTR-2019-0005.

B. Determination To Grant Certain Exclusions

    Based on evaluation of the factors set forth in the June 24 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 forth 
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 forth in the Annex, the exclusions are reflected in two 10-
digit HTSUS subheadings, which cover 15 separate exclusion requests, 
and 144 specially prepared product descriptions, which cover 170 
separate exclusion requests.
    In accordance with the June 24 notice, the exclusions are available 
for any product that meets the description in the Annex, regardless of 
whether the importer benefitting from the product exclusion filed an 
exclusion request. Further, the scope of each exclusion is governed by 
the scope of the product descriptions in the Annex, and not by the 
product descriptions found in any particular request for exclusion.
    Paragraph A, subparagraphs 3 through 7 of the Annex contain 
conforming amendments to the HTSUS reflecting the modifications made by 
the Annex.
    Paragraph B of the Annex contains amendments reflecting technical 
corrections to a certain notes of the HTSUS. Paragraph B, subparagraph 
1, makes a technical correction to U.S. note 20(mm)(6), published at 84 
FR 61674 (November 13, 2019), as modified by Annex B(b) of 85 FR 9921 
(February 20, 2020). Paragraph B, subparagraph 2, makes a technical 
correction to U.S. note (20)(qq)(40), published at 85 FR 6674 (February 
5, 2020). Paragraph B, subparagraph 3, makes a technical correction to 
U.S. note (20)(ss)(17), published at 85 FR 9921 (February 20, 2020).
    As stated in the September 20, 2019 notice, the exclusions will 
apply from September 24, 2018, to August 7, 2020. 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. 2020-09828 Filed 5-7-20; 8:45 am]
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