[Federal Register Volume 89, Number 98 (Monday, May 20, 2024)]
[Rules and Regulations]
[Pages 43740-43743]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10725]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 705

[Docket No. 240306-0071]
RIN 0694-AJ27


Revisions of the Section 232 Steel and Aluminum Tariff Exclusions 
Process

AGENCY: Bureau of Industry and Security, U.S. Department of Commerce.

ACTION: Final rule.

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SUMMARY: This final rule revises aspects of the process for requesting 
exclusions from the duties and quantitative limitations on imports of 
aluminum and steel discussed in five previous Bureau of Industry and 
Security (``BIS'') interim final rules implementing the exclusion 
process authorized by the President under section 232 of the Trade 
Expansion Act of 1962, as amended (``Section 232''). The changes in 
this final rule are also informed by public comments on a proposed rule 
on the Section 232 exclusions process that was published by BIS on 
August 28, 2023 (August 2023 Proposed Rule), detailed below. This final 
rule thus removes 12 General Approved Exclusions (GAEs) that were added 
in the December 2020 rule and maintained through the December 2021 
rule, consisting of six GAEs for steel and six GAEs for aluminum.

DATES: This final rule is effective July 1, 2024.

FOR FURTHER INFORMATION CONTACT: For questions regarding this interim 
final rule, contact Kevin Coyne at 202-482-2313 or via email 
[email protected], or email [email protected] regarding 
provisions in this rule specific to steel exclusion requests and 
[email protected] regarding provisions in this rule specific to 
aluminum exclusion requests.

SUPPLEMENTARY INFORMATION:

Background

    On March 8, 2018, Proclamations 9704 and 9705 were issued imposing 
duties on imports of aluminum and steel, respectively. The 
Proclamations also authorized the Secretary of Commerce (``the 
Secretary'') to grant exclusions from the duties if the Secretary 
determines the steel or aluminum article for which the exclusion is 
requested is not ``produced in the United States in a sufficient and 
reasonably available amount or of a satisfactory quality'' or should be 
excluded ``based upon specific national security considerations,'' and 
provided authority for the Secretary to issue procedures for exclusion 
requests. On April 30, 2018, Proclamations 9739 and 9740, and on May 
31, 2018, Proclamations 9758 and 9759, set quantitative limitations on 
the import of steel and aluminum from certain countries in lieu of the 
duties. On August 29, 2018, in Proclamations 9776 and 9777, the 
Secretary was authorized to grant exclusions from quantitative 
limitations based on the same standards applicable to exclusions from 
the tariffs.

Implementing and Improving the 232 Exclusions Process

    Since March 19, 2018, Commerce has published five interim final 
rules (IFRs) that established and made various improvements to the 
Section 232 exclusions process, as well as a Notice of Inquiry and a 
Proposed Rule seeking public comment on certain aspects of the Section 
232 exclusions process.
    On March 19, 2018, BIS issued an IFR, Requirements for Submissions 
Requesting Exclusions from the Remedies Instituted in Presidential 
Proclamations Adjusting Imports of Steel into the United States and 
Adjusting Imports of Aluminum into the United States; and the Filing of 
Objections to Submitted Exclusion Requests for Steel and Aluminum (83 
FR 12106), establishing the Section 232 exclusions process in 
supplements no. 1 and 2 to 15 CFR part 705.
    On September 11, 2018, BIS issued a second IFR, Submissions of 
Exclusion Requests and Objections to Submitted Requests for Steel and 
Aluminum (83 FR 46026), which revised the exclusions process to 
increase transparency, fairness, and efficiency.
    On June 10, 2019, BIS issued a third IFR, Implementation of New 
Commerce Section 232 Exclusions Portal (84 FR 26751), that revised the 
two supplements to part 705 to grant the public the ability to submit 
new exclusion requests through the Section 232 Exclusions Portal while 
still allowing the opportunity for public comment on the portal.
    On May 26, 2020, BIS issued a notice of inquiry with request for 
comment, Notice of Inquiry Regarding the Exclusions Process for Section 
232 Steel and Aluminum Import Tariffs and Quotas (85 FR 31441), that 
sought public comment on the appropriateness of the information 
requested and considered in applying the exclusion criteria and the 
efficiency and transparency of the process employed.
    On December 14, 2020, BIS issued a fourth IFR, Section 232 Steel 
and Aluminum Tariff Exclusions Process (85 FR 81060) (4th IFR), which 
established General Approved Exclusions (GAEs) to reduce the number of 
exclusion requests for products consistently found not to be produced 
in the United States, reducing the submission burden on both industry 
and the Section 232 exclusions process. The 4th IFR identified 123 GAEs 
that had generally never received an objection or very few objections 
via the Section 232 exclusions process. GAEs are available to all 
would-be requesters for steel and aluminum products imported under 10-
Digit Harmonized Tariff Schedule of the United States (HTSUS) 
classifications without quantity limit or expiration date. For 
information regarding the

[[Page 43741]]

adoption of the GAE policy, please review the 4th IFR.
    On December 9, 2021, BIS subsequently suspended 30 GAEs in its 
fifth IFR, Removal of Certain General Approved Exclusions Under the 
Section 232 Steel and Aluminum Tariff Exclusion Process (86 FR 70003), 
on the Section 232 Exclusions process because they were determined by 
BIS to no longer fit the criteria of a GAE.
    On January 3, 2022, Presidential Proclamations 10327 (87 FR 1) and 
10328 (87 FR 11) were published. These Proclamations implemented an 
understanding reached between the United States and the European Union 
including the establishment of tariff rate quotas for steel and 
aluminum articles imported from the European Union member countries. 
Proclamation 10328 also directed the Secretary of Commerce to seek 
public comment on the Section 232 exclusions process, including the 
responsiveness of the exclusions process to market demand and enhanced 
consultation with U.S. firms and labor organizations.
    On February 10, 2022, BIS published Request for Public Comments on 
the Section 232 Exclusions Process (87 FR 7777) (February 2022 Notice), 
as directed by Presidential Proclamation 10328. The notice sought 
public comment on a variety of topics regarding the responsiveness of 
the exclusions process to market demand and enhanced consultation with 
U.S. firms and labor organizations. The notice comment period closed in 
March 2022, having received nearly 100 comments.
    On August 28, 2023, BIS published its proposed rule entitled 
Revisions of the Section 232 Steel and Aluminum Exclusions Process (88 
FR 58525) (August 2023 Proposed Rule). The rule proposed several 
revisions to the Section 232 exclusions process, including adjustments 
to the current criteria for identifying GAEs, the introduction of new 
General Denied Exclusions (GDEs), and the introduction of new 
certification requirements for both Requestors and Objectors.

Public Comments and BIS Responses

    The public comment period on the August 2023 Proposed Rule closed 
on October 12, 2023. BIS received roughly 100 public comments on the 
proposed rule. This is the first of at least two final actions stemming 
from the August 2023 Proposed Rule. While BIS will further analyze the 
comments received on the August 2023 Proposed Rule, the public comments 
described below provide a sufficient basis for the action taken in this 
final rule. This rule is a response to that issue alone. BIS will 
respond to comments received on the August 2023 Proposed Rule in a 
forthcoming final rule that details broader changes to the Section 232 
exclusions process.
    Comment 1: BIS received multiple comments regarding the efficacy of 
specific GAEs. The majority of commenters opposed the continuing use of 
certain GAEs as thwarting the objective of the Section 232 action, 
including the ability to submit objections to exclusion requests. One 
commenter specifically said:

    As a result of these GAEs, the vast volume of aluminum extrusion 
imports exempt from Section 232 tariffs . . . are once again able to 
directly and unfairly compete with U.S.-produced extrusions. This 
includes imports . . . covered by the GAEs (HTSUS 7609.00.0000; 
7604.21.0010; 7604.29.1010; and 7604.29.5090) . . . By offering 
blanket duty-free treatment to importers of these products, the GAEs 
have effectively gutted any relief the Section 232 could provide for 
the extrusions industry.

    BIS Response: GAEs addressed a long-standing request from exclusion 
requesters to create a more efficient process to approve certain 
exclusions where Commerce has determined that: (1) No objections will 
be received; and (2) it is warranted to approve an exclusion for all 
importers to use. As always, BIS evaluates all changes to the Section 
232 exclusions process to determine if they improve the efficiency and 
effectiveness of the process, and thus U.S. national security. It was 
clear to BIS that an evaluation of the GAEs was warranted. The initial 
review has highlighted the need to remove additional GAEs. Removing 
these GAEs supports the effectiveness of the Section 232 tariffs and 
therefore U.S. national security.

Regulatory Changes

    With this final rule, BIS is removing 12 of the 93 GAEs from 
supplements no. 2 and no. 3 to part 705 (six from each supplement). 
These GAEs were introduced in the December 2020 rule and maintained 
through the December 2021 rule. This final rule removes the following 
12 GAEs:
     6 GAEs for steel: GAE.24.S: 7211296080; GAE.43.S: 
7209900000; GAE.46.S: 7216330090; GAE.84.S: 7209270000; GAE.90.S: 
7216100010; and GAE.93.S: 7208380015 and
     6 GAEs for aluminum: GAE.1.A: 7609000000; GAE.4.A: 
7604210010; GAE.5.A: 7604291010; GAE.9.A: 7601209080; GAE.10.A: 
7607116010; and GAE.13.A: 7604295090.
    The steel and aluminum articles specified by these 12 GAEs will 
revert to the duties and treatment previously established under 
Presidential Proclamations 9704 and 9705 as well as subsequent 
Proclamations.
    BIS does not anticipate that suspension of these 12 GAEs will 
substantially increase the total volume of submitted exclusion requests 
in the Section 232 Exclusions Portal. BIS has received 1,645 exclusion 
requests from 31 requestors for articles covered by these 12 GAEs in 
the Section 232 Exclusions Portal over an approximate eighteen-month 
period prior to the December 2020 rule. BIS estimates that the removal 
of these 12 GAEs will affect roughly 30 requestors who submit exclusion 
requests and will lead to the submission of an additional 1,000 
exclusion requests per year in the Section 232 Exclusions Portal.
    This final rule makes no additional changes to the other 81 GAEs 
that will continue to remain in supplements no. 2 and no. 3. As noted 
above, BIS made the determination to remove these 12 GAEs based on 
public comments received to the August 2023 Proposed Rule that was 
bolstered by internal analysis of exclusions data. It must be noted 
that should analysis of these GAEs change in the future, BIS may 
reissue these GAEs in whole or in part in subsequent rules.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been determined to be a ``significant 
regulatory action,'', under Executive Order 12866. Pursuant to 
Proclamations 9704 and 9705 of March 8, 2018, and Proclamations 9776 
and 9777 of August 29, 2018, the establishment of procedures for an 
exclusions process under each Proclamation shall be published in the 
Federal Register.
    2. The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) 
(PRA) provides that an agency generally cannot conduct or sponsor a 
collection of information, and no person is required to respond to nor 
be subject to a penalty for failure to comply with a collection of 
information, unless that collection has obtained Office of Management 
and Budget (OMB)

[[Page 43742]]

approval and displays a currently valid OMB Control Number.
    This final regulation involves three collections currently approved 
by OMB with the following control numbers:
     Exclusions from the Section 232 National Security 
Adjustments of Imports of Steel and Aluminum (control number 0694-
0139).
     Objections from the Section 232 National Security 
Adjustments of Imports of Steel and Aluminum (control number 0694-
0138).
     Procedures for Submitting Rebuttals and Surrebuttals 
Requests for Exclusions from and Objections to the Section 232 
Adjustments for Steel and Aluminum (OMB control number 0694-0141).
    This rule is expected to increase the burden hours for one of the 
collections associated with this rule, OMB control number 0694-0139. 
This increase is expected because of the removal of 6 GAEs for steel 
and 6 GAEs for aluminum, which is expected to result in an increase of 
1,000 exclusion request submissions per year. These GAE removals are 
expected to increase the burden hours for this collection by 4000, for 
a total cost increase of $148,000 to the public. BIS submitted, and OMB 
approved a non-substantive change for an increase in 4000 burden hours 
to the current 237,846. As BIS asserted in the 4th IFR that the steel 
and aluminum articles identified as being eligible for GAEs, including 
those being removed in today's rule, had not received any objections, 
the addition of those new GAEs was not estimated to result in a 
decrease in the number of objections, rebuttals, or surrebuttals 
received by BIS.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) (APA) requiring notice of proposed rulemaking, the opportunity for 
public comment, and a delay in effective date are inapplicable because 
this regulation involves a military or foreign affairs function of the 
United States. (See 5 U.S.C. 553(a)(1)). As explained in the reports 
submitted by the Secretary to the President, steel and aluminum are 
being imported into the United States in such quantities or under such 
circumstances as to threaten to impair the national security of the 
United States, and therefore the President is implementing these 
remedial actions (as described Proclamations 9704 and 9705 of March 8, 
2018) to protect U.S. national security interests. That implementation 
includes the creation of an effective process by which affected 
domestic parties can obtain exclusion requests ``based upon specific 
national security considerations.'' BIS started this process with the 
publication of the March 19 rule and refined the process with the 
publication of the September 11, June 10, December 2020, and December 
2021 rules and is continuing the process with the publication of this 
final rule. Commenters on the past rules (March 19, September 11, and 
June 10 rule, December 2020, and December 2021) were generally 
supportive and welcomed the idea of creating an exclusion process, but 
most of the commenters believe the exclusion process, although 
improving over time, still could be significantly improved for it to 
achieve the intended purpose. The commenters identified several areas 
where transparency, effectiveness, and fairness of the process could be 
improved. BIS understands the importance of having a transparent, fair, 
and efficient product exclusion request process, consistent with the 
directive provided by the President to create this type of process to 
mitigate any unintended consequences of imposing the tariffs on steel 
and aluminum to protect critical U.S. national security interests. The 
revisions to the 232 exclusions process are informed by the comments 
received in response to the August 2023 Proposed Rule and BIS's 
experience with managing the 232 exclusions process.
    Additionally, BIS finds that there is good cause under 5 U.S.C. 
553(d)(3) to waive the delay in effective date; given the delays would 
be either impracticable or contrary to the public interest because the 
actions are tied to the effectiveness of the Section 232 tariffs and 
therefore U.S. national security. The public comments on this matter 
indicated that there was an urgency to ensuring the changes are 
implemented for the effectiveness of the Section 232 process. 
Therefore, this final rule will be effective upon publication in the 
Federal Register.
    Consistent with the Regulatory Flexibility Act, as amended by the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (5 
U.S.C. 601 et seq.), BIS has prepared the following final regulatory 
flexibility analysis (FRFA) of the impact that this final rule will 
have on small businesses.

Description of the Reasons Why Action Is Being Considered

    The policy reasons for issuing this final rule are discussed in the 
background section of the preamble of this document and, consequently, 
are not repeated here.

Statement of the Objectives of, and Legal Basis for, the Proposed Rule; 
Identification of All Relevant Federal Rules Which May Duplicate, 
Overlap or Conflict With the Proposed Rule

    The objective of this final rule, and all other Section 232-related 
rules published by BIS, is discussed in the background section of the 
preamble of this document and, consequently, are not repeated here. The 
legal basis for this final rule is as follows: Section 232 of the Trade 
Expansion Act of 1962, as amended (19 U.S.C. 1862) and Reorg. Plan No. 
3 of 1979 (44 FR 69273, December 3, 1979).
    No other Federal rules duplicate, overlap, or conflict with this 
final rule.

Number and Description of Small Entities Regulated by the Proposed 
Action

    This final rule would apply to all persons engaged in the Section 
232 exclusions process. BIS does not collect or maintain the data 
necessary to determine exactly how many of the affected persons are 
small entities as that term is used by the Small Business 
Administration. However, BIS does ask requestors of the Section 232 
exclusions process to self-identify if they are a small business as 
defined by the Small Business Administration. From this data, BIS has 
estimated the total number of requestors and objectors who are likely 
to be small businesses that would be impacted by changes identified in 
this rule.
    Roughly 380 requestors self-identified as small businesses, filing 
roughly 27,000 exclusion requests in the Section 232 exclusions portal 
since March 2022, when BIS began including the option for requestors to 
self-identify as a small business. BIS does not have the same self-
identification option for objectors. However, over the same period of 
time, roughly 100 objectors filed objections in the Section 232 
exclusions portal; many of these are easily identifiable as being large 
corporations, not small businesses. Therefore, somewhere between 380 
and 500 small businesses could be impacted by these changes. Specific 
burden estimates for OMB under control numbers 0694-0139 (Exclusions 
from the Section 232 National Security Adjustments of Imports of Steel 
and Aluminum), 0694-0138 (Objections from the Section 232 National 
Security Adjustments of Imports of Steel and Aluminum), and 0694-0141 
(Procedures for Submitting Rebuttals and Surrebuttals Requests for 
Exclusions from and Objections to the Section 232 Adjustments for Steel 
and Aluminum) are detailed in paragraph 2 of the

[[Page 43743]]

Rulemaking Requirements section above.
    Based on the analysis provided above, the revisions in this rule 
would not impose a significant economic impact on a substantial number 
of small businesses.

Description of the Projected Reporting, Recordkeeping, and Other 
Compliance Requirements of the Proposed Rule

    The changes in this rule and the corresponding reporting, 
recordkeeping, and other compliance requirements are discussed in the 
background section of the preamble of this document and, consequently, 
are not repeated here. To the extent that compliance with the changes 
in this rule would impose a burden on persons, including small 
businesses, BIS believes the burden will be minimal.

Significant Alternatives and Underlying Analysis

    As noted above, BIS does not believe that the revisions in this 
rule will have a significant economic impact on small businesses. 
Nevertheless, consistent with 5 U.S.C. 603(c), BIS considered 
significant alternatives to these revisions to assess whether the 
alternatives would: (1) accomplish the stated objectives of this final 
rule (consistent with the objectives of the Section 232 exclusions 
process); and (2) minimize any significant economic impact of this 
final rule on small entities. BIS has determined that revisions 
detailed above are the least disruptive alternative for implementing 
changes to the Section 232 exclusions process.
    Lastly, consistent with 5 U.S.C. 603(c), BIS assessed the use of 
performance standards rather than design standards and also considered 
whether an exemption for small businesses was practical under the 
circumstances (i.e., within the context of the changes in this rule).
    This final rule does not contain an exemption for small businesses 
from the Section 232 exclusions process changes because these controls 
are essential to U.S. national security and BIS' regulations apply to 
all parties. An exemption for small businesses would undermine the 
effectiveness of these revisions.

Conclusion

    BIS has identified changes to the Section 232 exclusions process. 
Consequently, consistent with the Regulatory Flexibility Act, BIS has 
prepared this FRFA addressing the impact that this final rule will have 
on small entities. BIS's assessment indicates that the amendments in 
this rule will not have a significant economic impact on a substantial 
number of small entities.
    Please submit any comments concerning this FRFA in accordance with 
the instructions provided in the ADDRESSES section of this final rule.

List of Subjects in 15 CFR Part 705

    Administrative practice and procedure, Business and industry, 
Classified information, Confidential business information, Imports, 
Investigations, National defense.

    For the reasons set forth in the preamble, part 705 of subchapter A 
of 15 CFR chapter VII is amended as follows:

PART 705--EFFECT OF IMPORTED ARTICLES ON THE NATIONAL SECURITY

0
1. The authority citation for part 705 continues to read as follows:

    Authority:  Section 232 of the Trade Expansion Act of 1962, as 
amended (19 U.S.C. 1862) and Reorg. Plan No. 3 of 1979 (44 FR 69273, 
December 3, 1979).


0
2. Supplement no. 2 to part 705 is amended by removing the entries for 
``GAE.24.S: 7211296080;'' ``GAE.43.S: 7209900000;'' ``GAE.46.S: 
7216330090;'' ``GAE.84.S: 7209270000;'' ``GAE.90.S: 7216100010;'' and 
``GAE.93.S: 7208380015''.

0
3. Supplement no. 3 to part 705 is amended by removing the entries for 
``GAE.1.A: 7609000000;'' ``GAE.4.A: 7604210010;'' ``GAE.5.A: 
7604291010;'' ``GAE.9.A: 7601209080;'' ``GAE.10.A: 7607116010;'' and 
``GAE.13.A: 7604295090''.

Matthew S. Borman,
Principal Deputy Assistant Secretary for Export Administration.
[FR Doc. 2024-10725 Filed 5-17-24; 8:45 am]
BILLING CODE 3510-33-P