[Federal Register Volume 85, Number 62 (Tuesday, March 31, 2020)]
[Notices]
[Pages 17936-17938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06600]


=======================================================================
-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

SUMMARY: On August 20, 2019 (August 20 notice), at the direction of the 
President, the U.S. Trade Representative determined to modify the 
action being taken in the investigation by imposing additional duties 
of 10 percent ad valorem on goods of China with an annual trade value 
of approximately $300 billion as part of the action in the Section 301 
investigation of China's

[[Page 17937]]

acts, policies, and practices related to technology transfer, 
intellectual property, and innovation. The additional duties on 
products in List 1, which is set out in Annex A of the August 20 
notice, became effective on September 1, 2019. On August 30, 2019, at 
the direction of the President, the U.S. Trade Representative 
determined to increase the rate of the additional duty applicable to 
the tariff subheadings covered by the August 20 notice from 10 percent 
to 15 percent. On January 22, 2020, the U.S. Trade Representative 
determined to reduce the rate from 15 percent to 7.5 percent. The U.S. 
Trade Representative initiated a product exclusion process in October 
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. The U.S. 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 
September 1, 2019, the effective date of List 1 of the August 2 notice, 
and will extend to September 1, 2020.

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 40823 (August 16, 2018), 83 
FR 47974 (September 21, 2018), 83 FR 49153 (September 28, 2018), 84 FR 
20459 (May 9, 2019), 84 FR 43304 (August 20, 2019), 84 FR 45821 (August 
30, 2019), 84 FR 57144 (October 24, 2019), 84 FR 69447 (December 18, 
2019), 85 FR 3741 (January 22, 2020), 85 FR 13970 (March 10, 2020), and 
85 FR 15244 (March 17, 2020).
    In the August 20 notice (84 FR 43304), the U.S. Trade 
Representative, at the direction of the President, announced a 
determination to modify the action being taken in the Section 301 
investigation by imposing an additional 10 percent ad valorem duty on 
products of China with an annual aggregate trade value of approximately 
$300 billion. The August 20 notice contains two separate lists of 
tariff subheadings, with two different effective dates. List 1, which 
is set out in Annex A of the August 20 notice, was effective September 
1, 2019. List 2, which is set out in Annex C of the August 20 notice, 
was scheduled to take effect on December 15, 2019.
    On August 30, 2019 (84 FR 45821), the U.S. Trade Representative, at 
the direction of the President, determined to modify the action being 
taken in the investigation by increasing the rate of additional duty 
from 10 to 15 percent ad valorem on the goods of China specified in 
Annex A (List 1) and Annex C (List 2) of the August 20 notice. On 
October 24, 2019 (October 24 notice), the U.S. Trade Representative 
established a process by which U.S. stakeholders could request 
exclusion of particular products classified within an 8-digit 
Harmonized Tariff Schedule of the United States (HTSUS) subheading 
covered by List 1 of the August 20 notice from the additional duties. 
See 84 FR 57144. Subsequently, the U.S. Trade Representative announced 
a determination to suspend until further notice the additional duties 
on products set out in Annex C (List 2) of the August 20 notice. See 84 
FR 69447 (December 18, 2019). The U.S. Trade Representative later 
determined to further modify the action being taken by reducing the 
additional duties for the products covered in Annex A of the August 20 
notice (List 1) from 15 percent to 7.5 percent. See 85 FR 3741 (January 
22, 2020).
    Under the October 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 subheading covered by the August 20 notice. 
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, among other 
information. 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 October 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 October 24 notice required submission of requests for exclusion 
from List 1 of the August 20 notice no later than January 31, 2020, and 
noted that the U.S. Trade Representative periodically would announce 
decisions. In March 2020, the U.S. Trade Representative announced two 
sets of exclusions. See 85 FR 13970 and 85 FR 15244. The Office of the 
United States Trade Representative regularly updates the status of each 
pending request on the Exclusions Portal at https://exclusions.ustr.gov/s/docket?docketNumber=USTR-2019-0017.

B. Determination To Grant Certain Exclusions

    Based on evaluation of the factors set out in the October 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 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, the exclusions are reflected in five 10-
digit HTSUS subheadings and 7 specially prepared product descriptions, 
which together cover 36 separate exclusion requests.
    In accordance with the October 24 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 subheading as described in the Annex, and not by the product 
descriptions set out in any particular request for exclusion.

[[Page 17938]]

    Paragraph A, subparagraphs (3)-(4) of the Annex contain conforming 
amendments to the HTSUS reflecting the modifications made by the Annex.
    As stated in the October 24 notice, the exclusions will apply from 
September 1, 2019, the effective date of List 1 of the August 20 
notice, and will extend for one year to September 1, 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.

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 September 1, 2019, subchapter III of chapter 
99 of the Harmonized Tariff Schedule of the United States (HTSUS) is 
modified:
    1. by inserting the following new heading 9903.88.44 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
----------------------------------------------------------------------------------------------------------------
``9903.88.44.....................  Articles the product of   The duty provided
                                    China, as provided for    in the applicable
                                    in U.S. note 20(ww) to    subheading''.
                                    this subchapter, each
                                    covered by an exclusion
                                    granted by the U.S.
                                    Trade Representative.
----------------------------------------------------------------------------------------------------------------

    2. by inserting the following new U.S. note 20(ww) to subchapter 
III of chapter 99 in numerical sequence:
    ``(ww) The U.S. Trade Representative determined to establish a 
process by which particular products classified in heading 9903.88.15 
and provided for in U.S. notes 20(r) and (s) to this subchapter could 
be excluded from the additional duties imposed by heading 9903.88.15. 
See 84 FR 43304 (August 20, 2019), 84 FR 45821 (August 30, 2019), 84 FR 
57144 (October 24, 2019) and 85 FR 3741 (January 22, 2020). Pursuant to 
the product exclusion process, the U.S. Trade Representative has 
determined that the additional duties provided for in heading 
9903.88.15 shall not apply to the following particular products, which 
are provided for in the following enumerated statistical reporting 
numbers:
    (1) 0505.10.0050
    (2) 3926.90.9925
    (3) 6506.10.3045
    (4) 8512.10.2000
    (5) 8528.72.6420
    (6) Coverings, of plastics, designed to fit over wound sites or 
casts thereby forming a protective seal for keeping the covered area 
dry and debris free while showering or bathing (described in 
statistical reporting number 3926.90.9990)
    (7) Pouches of plastics, of a kind used with manually operated pill 
or tablet crushers to capture the powdered medicaments (described in 
statistical reporting number 3926.90.9990)
    (8) Refillable dispensers of plastics, designed for mounting on a 
vertical wall, of a kind used to store and dispense emesis containment 
bags in medical settings (described in statistical reporting number 
3926.90.9990)
    (9) Sterile urology drain bags of plastics, designed to fit over a 
urology table extension, with a flap extension that provides sterile 
separation of the patient from the table surface and directs fluids 
into and through a filter at the top of an attached drain hose leading 
to a collection container (described in statistical reporting number 
3926.90.9990)
    (10) Ice bags of textile materials, for treating injuries or 
soreness, each refillable (described in statistical reporting number 
6307.90.9889)
    (11) Identification wristbands of textile materials, each with a 
blank panel (described in statistical reporting number 6307.90.9889)
    (12) Apparatus suitable for wearing on the wrist, having time-
display functions, each article having an accelerometer and being 
capable of displaying and transmitting data sent to it by a network 
(e.g., portable ADP unit, LAN or cellular network) (described in 
statistical reporting number 8517.62.0090)''
    3. by amending the last sentence of the first paragraph of U.S. 
note 20(r) to subchapter III of chapter 99:
    a. by inserting ``; or (3) heading 9903.88.44 and U.S. note 20(ww) 
to subchapter III of chapter 99'' after ``U.S. note 20(uu) to 
subchapter III of chapter 99'';
    b. by deleting ``except as provided in heading 9903.88.39'' and by 
inserting ``except as provided in: (1) Heading 9903.88.39'' in lieu 
thereof; and
    c. by deleting ``chapter 99 except as provided in heading 
9903.88.42'' and by inserting ``chapter 99; (2) heading 9903.88.42'' in 
lieu thereof.
    4. by amending the article description of heading 9903.88.15;
    a. by deleting ``heading 9903.88.39 or'' and inserting ``headings 
9903.88.39,'' in lieu thereof;
    b. by deleting ``heading 9903.88.42,'' and inserting 
``9903.88.42,'' in lieu thereof; and
    c. by inserting ``or 9903.88.44,'' after ``9903.88.42,''.

[FR Doc. 2020-06600 Filed 3-30-20; 8:45 am]
BILLING CODE 3290-F0-P