[Federal Register Volume 84, Number 75 (Thursday, April 18, 2019)]
[Notices]
[Pages 16310-16316]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-07758]


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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.

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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. In December 
2018 and March 2019, the Trade Representative granted two prior sets of 
exclusion requests. 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 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), 83 FR 
65198 (December 19, 2018), 83 FR 67463 (December 28, 2018), 84 FR 7966 
(March 5, 2019), and 84 FR 11152 (March 25, 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 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 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. In 
December 2018, the Trade Representative granted an initial set of 
exclusion requests. See 83 FR 67463. The Trade Representative granted a 
second set of exclusions in March 2019. See 84 FR 11152. The Office of 
the United States 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 
reflected in 21 specially prepared product descriptions, which cover 
348 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 product descriptions in 
the Annex to this notice, and not by the product descriptions set out 
in any particular request for exclusion.
    Paragraph A, subparagraphs (3)-(5) are conforming amendments to the 
HTSUS reflecting the modification made by the Annex to this notice.
    In order to clarify the periodic revisions to the HTSUS, paragraphs 
B and C of the Annex modifies the text to U.S. notes 20(i)(6) and 
20(i)(7) to subchapter III of chapter 99 of the Harmonized Tariff 
Schedule of the United States, as set out in the Annex of the notice 
published at 84 FR 11152 (March 25, 2019).
    Paragraph D of the Annex to this notice corrects a typographical 
error in U.S. note 20(i)(24) to subchapter III of chapter 99 of the 
Harmonized Tariff Schedule of the United States, as set out in the 
Annex of the notice published at 84 FR 11152 (March 25, 2019).
    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.

Stephen Vaughn,
General Counsel, Office of the U.S. Trade Representative.
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[FR Doc. 2019-07758 Filed 4-17-19; 8:45 am]
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