[Federal Register Volume 83, Number 248 (Friday, December 28, 2018)]
[Notices]
[Pages 67463-67468]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28277]


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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 proceeded to submit requests for the 
exclusion of specific products. This notice announces the Trade 
Representative's determination to grant certain 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 Arthur Tsao 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), and 
83 FR 40823 (August 16, 2018), 83 FR 47974 (September 21, 2018), and 83 
FR 65198 (December 19, 2018).
    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 opening 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

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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 had 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 only is available 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. 
The Trade Representative regularly updates the status of each pending 
request and posts the status at https://ustr.gov/issue-areas/enforcement/section-301-investigations/request-exclusion.

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 of 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 seven 10-digit HTSUS subheadings, and 24 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 10-digit headings and 
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 1,000 separate 
exclusion requests: the excluded 10-digit subheadings cover 918 
separate requests, and the 24 specially drafted product descriptions 
cover approximately 66 separate requests.
    As stated in 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.

Stephen Vaughn,
General Counsel, Office of the U.S. Trade Representative.
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[FR Doc. 2018-28277 Filed 12-27-18; 8:45 am]
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