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Rule2024-10725

Revisions of the Section 232 Steel and Aluminum Tariff Exclusions Process

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Published

May 20, 2024

Effective

July 1, 2024

Issuing agencies

Commerce DepartmentIndustry and Security Bureau

Abstract

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.

Full Text

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<title>Federal Register, Volume 89 Issue 98 (Monday, May 20, 2024)</title>
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[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 [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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
<a href="/cdn-cgi/l/email-protection#95def0e3fcfbbbd6faecfbf0d5f7fce6bbf1faf6bbf2fae3"><span class="__cf_email__" data-cfemail="024967746b6c2c416d7b6c6742606b712c666d612c656d74">[email&#160;protected]</span></a>, or email <a href="/cdn-cgi/l/email-protection#cd9eb9a8a8a1fffeff8dafa4bee3a9a2aee3aaa2bb"><span class="__cf_email__" data-cfemail="57042332323b65646517353e247933383479303821">[email&#160;protected]</span></a> regarding
provisions in this rule specific to steel exclusion requests and
<a href="/cdn-cgi/l/email-protection#13527f667e7a7d667e21202153717a603d777c703d747c65"><span class="__cf_email__" data-cfemail="dd9cb1a8b0b4b3a8b0efeeef9dbfb4aef3b9b2bef3bab2ab">[email&#160;protected]</span></a> 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:
<bullet> 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
<bullet> 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:
<bullet> Exclusions from the Section 232 National Security
Adjustments of Imports of Steel and Aluminum (control number 0694-
0139).
<bullet> Objections from the Section 232 National Security
Adjustments of Imports of Steel and Aluminum (control number 0694-
0138).
<bullet> 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

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