Notice2026-09489
Procedures To Apply for Company-Specific Onshoring Agreements To Obtain Tariff Adjustments for Pharmaceuticals and Pharmaceutical Ingredients Under Proclamation 11020
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Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 13, 2026
Issuing agencies
Commerce DepartmentIndustry and Security Bureau
Abstract
This notice announces the procedures for companies that manufacture pharmaceutical products to apply for company-specific agreements with the Department of Commerce (Commerce) to onshore manufacturing of pharmaceutical products and their ingredients. Companies that enter into such agreements are eligible for a reduced Section 232 duty rate for imports of their pharmaceutical products and associated ingredients. Companies are requested to submit applications within 30 days of publication in the Federal Register.
Full Text
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<title>Federal Register, Volume 91 Issue 92 (Wednesday, May 13, 2026)</title>
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[Federal Register Volume 91, Number 92 (Wednesday, May 13, 2026)]
[Notices]
[Pages 26989-26992]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-09489]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
[Docket No. 260428-0115]
X-RIN 0694-XC155
Procedures To Apply for Company-Specific Onshoring Agreements To
Obtain Tariff Adjustments for Pharmaceuticals and Pharmaceutical
Ingredients Under Proclamation 11020
AGENCY: Bureau of Industry and Security, Office of Strategic Industries
and Economic Security, U.S. Department of Commerce.
ACTION: Notice.
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SUMMARY: This notice announces the procedures for companies that
manufacture pharmaceutical products to apply for company-specific
agreements with the Department of Commerce (Commerce) to onshore
manufacturing of pharmaceutical products and their ingredients.
Companies that enter into such agreements are eligible for a reduced
Section 232 duty rate for imports of their pharmaceutical products and
associated ingredients. Companies are requested to submit applications
within 30 days of publication in the Federal Register.
DATES: Applications are requested by June 12, 2026.
ADDRESSES: Applications must be submitted electronically to:
<a href="/cdn-cgi/l/email-protection#b2c2dad3c0dfd3808180f2d0dbc19cd6ddd19cd5ddc4"><span class="__cf_email__" data-cfemail="ef9f878e9d828edddcddaf8d869cc18b808cc1888099">[email protected]</span></a>. Applications can be found at <a href="http://www.bis.gov/about-bis/bis-leadership-and-offices/SIES/section-232-investigations">www.bis.gov/about-bis/bis-leadership-and-offices/SIES/section-232-investigations</a>.
FOR FURTHER INFORMATION CONTACT: Stephen Astle, Director, Defense
Industrial Base Division, Office of Strategic Industries and Economic
Security, Bureau of Industry and Security, U.S. Department of Commerce
(202) 482-4506, <a href="/cdn-cgi/l/email-protection#89f9e1e8fbe4e8bbbabbc9ebe0faa7ede6eaa7eee6ff"><span class="__cf_email__" data-cfemail="05756d6477686437363745676c762b616a662b626a73">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
On April 2, 2026, the President issued Proclamation 11020 (91 FR
18183), ``Adjusting Imports of Pharmaceuticals and Pharmaceutical
Ingredients Into the United States,'' (Proclamation 11020) finding that
imports of pharmaceuticals and pharmaceutical ingredients threaten to
impair the national security of the United States and imposing tariffs
to adjust imports of such products pursuant to Section 232 of the Trade
Expansion Act of 1962 (Section 232). Proclamation 11020 imposed a 100
percent ad valorem tariff on certain imports of patented
pharmaceuticals and associated pharmaceutical ingredients, effective
September 29, 2026, for companies not listed in Annex III to
Proclamation 11020. Lower rates apply to patented pharmaceutical
products and associated ingredients from certain jurisdictions. At this
time, Section 232 tariffs do not apply to generic pharmaceutical
products and associated ingredients.
In clause (2) of Proclamation 11020, the President authorized the
Secretary of Commerce (Secretary) to enter into company-specific
onshoring agreements. Subparagraph (b) of clause (3) provides that
companies with onshoring plans approved by the Secretary will receive a
reduced duty rate of 20 percent. In addition, subparagraph (e) of
clause (3) provides that this rate of duty shall be zero until January
20, 2029, for those companies that also enter into Most Favored Nation
(MFN) deals with the U.S. Department of Health and Human Services
(HHS).
Clause (6) orders the Secretary to establish a process by which
companies can submit onshoring plans supporting eligibility for reduced
duty rates. All onshoring plans are subject to approval, monitoring,
and enforcement by the Secretary. Companies with qualifying onshoring
plans must submit periodic reports to Commerce regarding progress
towards fulfilling onshoring milestones. Commerce may require that such
reports be audited by an external auditing firm.
The Proclamation authorizes the Secretary to monitor and enforce
onshoring agreements. It also provides that in cases where the
executive branch assesses that a company engaged in fraud or
deliberately misled the United States Government with respect to its
onshoring commitments, Commerce may reimpose the tariffs introduced in
Proclamation 11020 both prospectively and retroactively on imports from
the relevant company, and it may impose other tariffs and penalties to
the extent consistent with applicable law.
[[Page 26990]]
Consistent with Proclamation 11020, this notice establishes the
criteria for company-specific agreements for the tariff adjustment
program, including the application process, documentation and
certification requirements, and eligibility conditions.
II. Application Process
Companies that market foreign-made patented pharmaceutical products
and associated ingredients into the United States, which are subject to
tariffs under Proclamation 11020, may apply to enter an onshoring
agreement. Applications can be found at <a href="http://www.bis.gov/about-bis/bis-leadership-and-offices/SIES/section-232-investigations">www.bis.gov/about-bis/bis-leadership-and-offices/SIES/section-232-investigations</a>. Applicants must
submit the application and associated documentation to
<a href="/cdn-cgi/l/email-protection#5c2c343d2e313d6e6f6e1c3e352f7238333f723b332a"><span class="__cf_email__" data-cfemail="93e3fbf2e1fef2a1a0a1d3f1fae0bdf7fcf0bdf4fce5">[email protected]</span></a>. The complete application should include the
following information, with reference, as appropriate, to the relevant
application section:
1. Section 1--Organization Information: Full legal name, address,
ownership structure and beneficial ownership, including the country
where the company's headquarters is located. The name, title, and
contract information of the authorized representative submitting the
application should also be included. The company should also provide
information about the products it manufactures and where such
manufacturing takes place, and whether the manufacturing occurs in
facilities that the company owns, contract manufacturers, or other.
2. Section 2--Total Investment: The grand total of new investments
to be made in the United States from January 20, 2025, to January 20,
2029. Specify the portion of the investment amount that pertains to new
capital expenditure, such as brick-and-mortar manufacturing plants and
buildings where research and development will take place, in the United
States.
3. Section 3--Onshoring Commitment: A comprehensive explanation of
what part of the company's existing patented product portfolio it will
onshore (products, volume, and value), including through the use of
contract manufacturers. Companies are encouraged to onshore as much of
their global production of pharmaceuticals, APIs, and upstream
pharmaceutical ingredients as possible, by January 20, 2029. Companies
may stipulate that projected onshoring timelines depend on expected
Food and Drug Administration regulatory approval timelines, which
should be described in the application.
4. Section 4--Percentage of U.S. and Global Sales Produced in U.S.:
The percentage of the company's U.S. sales of patented pharmaceuticals
whose APIs are produced in the United States as of January 20, 2025,
and the expected percentage of its U.S. sales that will be U.S.-made as
of January 20, 2029. Companies should also state the percentage of
their global sales that are U.S.-made as of January 20, 2025, and the
expected percentage of their global sales that will be U.S.-made as of
January 20, 2029. Information should be provided on both a unit and
revenue basis.
5. Section 5--Investment Commitment: The application should include
the following:
(1) a description of what part of its patented product portfolio
the company proposes not to onshore (products, value, and percentage)
by January 20, 2029;
(2) a statement that it is commercially unfeasible to onshore these
products, and an explanation as to why this is the case. Near-term
expiration of patents, and pharmaceutical products with an extremely
small market in the United States are relevant factors in this context;
(3) the estimated hypothetical cost to establish production
facilities in the United States for these products described in
paragraph (1) (without reducing the production of other products);
(4) a statement of the amount that the company commits to spend on
new brick-and-mortar facilities in the United States by January 20,
2029, over and above and in addition to the onshoring commitment
described in section 2 (``Onshoring Commitment'') above. This
expenditure can include new production machinery and retooling of
existing facilities. However, it should not include research and
development expenses or other operating expenses;
(5) investment and production milestones in Annex A through January
20, 2029, which are associated with the investment commitments in
paragraph (4). For example, companies should indicate the expected
start date, completion date, and location of any new construction
projects. They should also indicate the total amounts of money
associated with the Total Investment and Onshoring Commitment that they
project to be spent by the end of each calendar year;
(6) a commitment to submit audited reports to Commerce at least
semiannually regarding the company's progress towards fulfilling these
milestones, as well as the U.S. investment commitments;
(7) a statement of whether the company has entered into, or is
pursuing, a Most Favored Nation Pricing Agreement with the HHS; and
(8) a commitment to provide supporting information upon request by
Commerce, whether before or after entering into the onshoring
agreement.
5. Annex A--Planned Pharmaceutical Production Investments: This
annex provides a template for companies to submit the information
described above.
6. Annex B--Tariff Adjustment: In this annex, companies should
provide the following information, with respect to products for which
they request preferential treatment:
<bullet> HTSUS code (10-digit, if possible) for each product
<bullet> Advertised name and brand of product, as well as active
ingredient (or combination of active ingredients)
<bullet> Country of origin of products imported under each HTSUS code
<bullet> Importer of record names and importer of record numbers
<bullet> Name and address of exporters
<bullet> Name, owner, and address of foreign manufacturing facilities
<bullet> U.S. Customs and Border Protection (CBP) Manufacturer
Identification Code (MID) used for importations of products
Only patented pharmaceutical products and associated pharmaceutical
ingredients should be included in Annex B.
7. Certification: Company applications should be signed by a senior
official in the company. Applications shall include a certification,
such as a sworn statement, from a senior officer of the company
confirming that the submission is true, accurate, and complete to the
best of the company's knowledge, under penalty of perjury, and
confirming that the company has conducted reasonable diligence to
verify the accuracy of the assertions and facts contained in its
submissions.
8. Representations and Acknowledgments To Be Included in the
Application: ``[Drug Manufacturer] understands that any preferential
treatment resulting from the submission of this application will apply
only to Section 232 Tariffs (i.e., tariffs pursuant to Proclamation
11020) on [Drug Manufacturer]'s-branded pharmaceutical products and
associated pharmaceutical ingredients that [Drug Manufacturer] imports
into the United States, as specified in this application. Furthermore,
unless otherwise approved by Commerce, this preferential treatment
shall not apply to any products produced by companies that
[[Page 26991]]
[Drug Manufacturer] acquires after April 2, 2026, nor shall it apply to
products that [Drug Manufacturer] may acquire or license after April 2,
2026, nor shall it apply to products that [Drug Manufacturer] has not
itself developed as a majority participant. Any preferential tariff
treatment that [Drug Manufacturer] receives pursuant to an onshoring
agreement with Commerce is contingent on the President's grant of
authority to Commerce under Section 232 of the Trade Expansion Act of
1962 to adjust imports of certain pharmaceutical products through the
imposition of tariffs and the President's determination to authorize
the entry into force of agreements such as this one.''
9. Additional Information: Any other information the applicant
believes is necessary to facilitate Commerce's decision-making. If
companies believe that any of the requirements outlined above are not
appropriate for their particular situation, they should provide a
detailed explanation.
C. Review and Approval Process
Commerce may request supplemental documentation or clarification.
Commerce will make an individual, fact-specific, company-specific
decision for each applicant. Commerce may respond to individual
applications with questions, revisions, conditional approval pending
applicant's acceptance of proposed modifications to the proposal, or
approval of the proposal as submitted. There is no time limit for
Commerce's decisions. Approved applicants will be notified in writing
of approval. Relevant information from Annex B will be transmitted by
Commerce to CBP. CBP will administer the tariff adjustment at the time
of entry summary filing and may request additional documentation to
validate entries.
D. Usage and Enforcement
Unless otherwise approved by Commerce, the reduced tariff
treatment:
<bullet> Shall be used only by importers that the Drug Manufacturer
identifies as approved to import its products, and that Commerce
approves;
<bullet> Shall not apply to any products produced by a company that
the Drug Manufacturer acquires after April 2, 2026; and
<bullet> Shall not apply to products that the Drug Manufacturer may
acquire or license after April 2, 2026, nor shall it apply to products
that the Drug Manufacturer has not itself developed as a majority
participant.
E. Oversight and Adjustments
In accordance with clause (6) of Proclamation 11020, all onshoring
plans are subject to approval, monitoring, and enforcement by Commerce.
Commerce will monitor manufacturer and importer compliance and
communicate information regarding noncompliance to CBP, where
appropriate.
F. Confidentiality
Commerce will protect the confidentiality of all information
submitted by companies pursuing an onshoring agreement. The onshoring
application as well as any eventual agreements will include the
following confidentiality provision:
The Department of Commerce will protect the confidentiality of
confidential, trade secret, and/or proprietary information excluding
information in the public domain (``confidential information'')
provided by the Drug Manufacturer to the fullest extent allowed by law.
For example, subject to applicable laws, such information would be
protected from disclosure by the Trade Secrets Act, 18 U.S.C. 1905, and
under Exemptions 3 and/or 4 of the Freedom of Information Act
(``FOIA'') (5 U.S.C. 552(b)(3), (4)). The Department of Commerce shall
limit dissemination of Drug Manufacturer's confidential information to
those persons within its organization and other executive branch
agencies and entities who have a need to know such information to
fulfill the purpose of this Commerce Agreement and who agree to be
subject to the restrictions of this Commerce Agreement.
Drug Manufacturer may disclose the terms of this Commerce Agreement
and make any other public written disclosure regarding the existence
of, or performance under, this Commerce Agreement, to the extent
required, in the reasonable opinion of Drug Manufacturer's legal
counsel, to comply with applicable law, including without limitation
the rules and regulations promulgated by the United States Securities
and Exchange Commission or any other governmental authority, securities
exchange or securities regulator to which it is subject.
These provisions are consistent with and do not supersede, conflict
with, or otherwise alter the employee obligations, rights, or
liabilities created by existing statute or Executive order relating to
(1) classified information, (2) communications to Congress, (3) the
reporting to an Inspector General or the Office of Special Counsel of a
violation of any law, rule, or regulation, or mismanagement, a gross
waste of funds, an abuse of authority, or a substantial and specific
danger to public health or safety, or (4) any other whistleblower
protection. The definitions, requirements, obligations, rights,
sanctions, and liabilities created by controlling Executive orders and
statutory provisions are incorporated into this Commerce Agreement and
are controlling.
III. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.)
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) approval and displays a currently valid OMB Control
Number.
In Proclamation 11020 of April 2, 2026, ``Adjusting Imports of
Pharmaceuticals and Pharmaceutical Ingredients into the United States''
the President determined it was necessary and appropriate to direct the
Secretary of Commerce and the Secretary of Health and Human Services to
pursue negotiations of agreements or continue any current negotiations
of agreements to address the threatened impairment of the national
security with respect to imported patented pharmaceuticals and
associated pharmaceutical ingredients. The President authorized the
Secretary of Commerce to enter into and implement company-specific
onshoring agreements.
Because the Proclamation requires timely implementation of the
onshoring agreements to further U.S. economic and national security
interests by making pharmaceuticals more accessible and affordable in
the United States and by strengthening the domestic manufacturing base,
and reduce the national security risk posed by imports of patented
pharmaceuticals and associated pharmaceutical ingredients, BIS cannot
reasonably comply with the normal clearance procedures. Delaying this
collection would impede the ability of companies to enter into
onshoring agreements and compromise the effectiveness of the
Proclamation's implementation. The implementation of an ad valorem
tariff on imports of certain patented pharmaceuticals and
pharmaceutical ingredients, consistent with the intent of Proclamation
11020, also requires creating a process to allow any individual or
organization in the United States to submit onshoring agreement
applications for tariff adjustments. The
[[Page 26992]]
Department has determined the following conditions have been met:
a. The collection of information is needed prior to the expiration
of time periods normally associated with a routine submission for
review under the provisions of the Paperwork Reduction Act in view of
Proclamation 11020, <a href="https://www.federalregister.gov/documents/2026/04/09/2026-06956/adjusting-imports-of-pharmaceuticals-and-pharmaceutical-ingredients-into-the-united-states">https://www.federalregister.gov/documents/2026/04/09/2026-06956/adjusting-imports-of-pharmaceuticals-and-pharmaceutical-ingredients-into-the-united-states</a>.
b. The collection of information is essential to the mission of the
Department, in particular to allow companies seeking to obtain tariff
adjustments from the ad valorem tariff by submitting onshoring
agreements to effectuate the terms outlined by Proclamation 11020.
These collection requirements include detailed onshoring plans across
product portfolios, percentage of U.S. sales that are made in the
United States, investment and production milestones, and other
information required to substantiate the applications for reduced
tariff treatment under Section 232, hereby referenced as Onshoring
Agreements. The Onshoring Agreements, as described in this FRN, must be
submitted in electronic form via email to the BIS Section 232
Pharmaceuticals Investigation Inbox (<a href="/cdn-cgi/l/email-protection#790911180b14184b4a4b391b100a571d161a571e160f"><span class="__cf_email__" data-cfemail="9dedf5fceff0fcafaeafddfff4eeb3f9f2feb3faf2eb">[email protected]</span></a>). Onshoring
Agreements may be submitted within 30 days of this FRN publication and
all submissions are entirely voluntary on the part of the requesting
companies.
c. Public harm is reasonably likely to result if BIS were to follow
the normal clearance procedures before issuing this information
collection. BIS needs time to get onshoring agreements in place before
September 29, 2026, when the Section 232 tariffs for most companies
will become effective. This information collection allows companies to
apply for onshoring agreements to increase domestic manufacturing of
pharmaceutical products and their ingredients, which will increase the
stability of the industry. A delay in Commerce's ability to begin
immediate information collection from companies seeking an onshoring
agreement and inability to issue decisions before the 100 percent
tariff rate is in effect could lead to companies delaying decisions to
increase domestic manufacturing of pharmaceuticals, which would further
import dependence that the Presidential Proclamation is seeking to
reduce.
Agency: Commerce Department.
Type of Information Collection: New Collection.
Title of the Collection: Section 232 National Security Adjustments
to Imports of Pharmaceuticals.
Affected Public: Private Sector--Businesses.
Total Estimated Number of Respondents: [450].
Average Responses per Year: [1].
Total Estimated Number of Responses: [450].
Average Time per Response: 8 hours.
Total Annual Time Burden: [3,600].
OMB Control Number: [0694-0147].
Jessica Curyto,
Deputy Assistant Secretary for Technology Security.
[FR Doc. 2026-09489 Filed 5-11-26; 11:15 am]
BILLING CODE 3510-33-P
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