CBP Issues Additional Guidance for Steel and Aluminum Reporting

CBP is updating its Section 232 duties FAQs as it issues public instructions:
Section 232 Tariffs on Steel and Aluminum Frequently Asked Questions | U.S. Customs and Border Protection

Unknown Country of Melt/Pour or Smelt/Cast

• What if the importer does not know the country of steel melt and pour for a derivative product subject to Section 232 reporting?
  • For derivative steel, filers can report OTH for the country of melt and pour.
  • Importers must exercise reasonable care and work with their vendors to go back through their supply chain to identify the country of melt and pour for the steel in the derivative.
  • CBP defines the country of melt and pour as the original location where the raw steel is (1) first produced in a steel-making furnace in a liquid state and then (2) poured into its first solid shape. The first solid state can take the form of either a semi-
    finished product (slab, billets, or ingots) or a finished steel mill product. The location of melt and pour is customarily identified on mill test certificates that are commonplace in steel production, generated at each state of the production process, and maintained in the ordinary course of business.
• What if the importer does not know the country of aluminum smelt and cast for a derivative product subject to Section 232 reporting?
  • For derivative aluminum, the filer, as an interim solution, may report “RU” for Russia if the filer does not know the country of smelt or cast; and pay the 200 percent Russia aluminum duty pursuant to Presidential Proclamation 10522 (88
    FR 13267, March 2, 2023). Also see CSMS # 64384496. Importers may submit a post-summary correction to update the country of smelt or cast when they obtain information on the actual countr(ies) of smelt or cast. For a long-term solution, CBP is looking into other options for reporting an unknown country of smelt or cast, which will also require paying the 200 percent Russia aluminum duty. CBP will provide guidance through CSMS when more information is available.
  • Declaring Russia as the country of smelt/cast requires the use of HTSUS 9903.85.68.
  • This is the CBP-directed default solution, and the importer cannot opt to report the country of origin of the derivative article as the country of smelt/cast.
  • CBP defines the country of smelt and cast:
    • The primary country of smelt is the country where the largest volume of new aluminum metal is produced from alumina (or aluminum oxide) by the electrolytic Hall-Heroult process.
    • The secondary country of smelt is the country where the second largest volume of new aluminum metal is produced from alumina (or aluminum oxide) by the electrolytic Hall-Heroult process.
    • The country of cast is the country where the aluminum (with or without alloying elements) was last liquified by heat and cast into a solid state. The final solid state can take the form of either a semi-finished product (slab,
      billets or ingots) or a finished aluminum product. 
  • To pay 25% the importer must obtain the actual country of smelt/cast. Importers are working to figure out how to do this, and it is not easy. They must work back through their supply chain, potentially back several layers. The manufacturer of the
    derivative article may use aluminum from various sources / countries. For each production run, the manufacturer must be able to identify from which batch of aluminum they used. What if in one shipment to the U.S. there is more than one
    aluminum source? The importer must be prepared to prove to CBP where the aluminum was smelt and cast and should therefore discuss the requirement with each vendor of affected products. Can the supplier provide a demonstration of how they can certify the information to the importer? In their production records can they:
    • Trace back from the exact articles in a specific shipment to the U.S. to the production run.
    • Trace from the production run to the batch of aluminum used.
    • Trace from the batch of aluminum used to the supplier of the aluminum.
    • The supplier of the aluminum must be able to identify the party that smelt and cast the aluminum to prove the country of smelt and cast. 
  • CBP states in the FAQs they do not require an aluminum certificate of analysis to be filed at the time of entry, however CBP can request the importer to provide it. That means they need to be sure of the country of smelt/cast and be able to prove
    it. CBP is clear in stating it is the responsibility of the importer to exercise reasonable care when making entry and accurately declaring all requisite information.
  • When the importer pays the default 200% duty and subsequently can identify the country of smelt/cast, a PSC can be filed, subject to the broker’s post-entry fee. When filing a PSC, documentation to prove the country of smelt and the country of cast needs to be submitted to CBP or expect CBP to reject the PSC and revert the entry summary to its original version.

Product Does Not Contain Steel or Aluminum Content

• What if the HTSUS is on the steel or aluminum derivatives lists, but the product does not contain steel or aluminum?
  • CBP clarified there is no need to report two entry summary lines and report 0 weight and 0 value.
  • Report one entry summary line with the regular HTSUS number. Do not report the Section 232 Chapter 99 number. Do report other Chapter 99 numbers as necessary (Section 301 or IEEPA).
  • Report the country of melt/pour or smelt/cast, depending on which list the HTSUS number is on. CBP understands the importer is claiming no steel or aluminum, but their system requires the data elements to be completed.
    • For steel derivatives, declare the country of origin of the derivative product.
    • For aluminum derivatives, do not declare a primary country smelt, but report the secondary country of smelt and the country of cast as the country of origin of the derivative product.

HTS Number is on Both the Steel and Aluminum List

• The following subheadings are on both lists of derivatives outside Chapters 73 and 76.
  • 8547.90.00 for electrical conduit tubing and joints.
  • 9403.20.00 for metal furniture.
• How to declare on entry?
  • Aluminum only – If the article has only aluminum and no steel, then report the aluminum Chapter 99 number. As per the above point, if the country of smelt and cast is unknown, the importer must report RU (Russia) as the smelt/cast and use
    HTS 9903.85.68 to pay 200%. Report the smelt/cast for the aluminum present. Report the steel melt/pour as the country of origin of the article (this aligns with the direction CBP gave for when a derivative does not have any steel or aluminum content).
  • Steel only – If the article has only steel and no aluminum, then report the steel Chapter 99 number. Report the melt/pour for the steel aluminum present in the article. Report the aluminum smelt/cast as the country of origin of the article (this
    aligns with the direction CBP gave for when a derivative does not have any steel or aluminum content).
  • Both aluminum and steel – If the article has both aluminum and steel, report both the aluminum and the steel Chapter 99 numbers. That means 25% needs to be paid on each Chapter 99 number, for a total of 50%. If the country of smelt/cast for the aluminum is unknown the importer must report RU (Russia) as the smelt/cast and pay 200%.
• If the importer can properly break out the weight and value of the aluminum and the steel, it appears we need to report three entry summary lines to pay the Section 232 duties on the metal content. 

Value of Steel or Aluminum for Derivative Product Outside Chapters 73 or 76

• How should the value of the steel or aluminum content be determined?
  • The value of the steel/aluminum content should be determined in accordance with the principles of the Customs Valuation Agreement, as implemented in 19 U.S.C. 1401a. Thus, the value of the steel/aluminum content is the total price paid or
    payable for that content, which is the total payment (direct or indirect, and exclusive of any costs, charges, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of exportation to the country of importation) made/to be made for the steel/aluminum content by the buyer to, or for the benefit of, the seller of the steel/aluminum content. Normally, this would be based on the invoice paid by the buyer of the steel/aluminum content to, or for the benefit of the seller of the steel/aluminum content.
  • The importer must exercise reasonable care when declaring that the value of the metal content is less than the value of the article. Depending on the parties in the supply chain, the value determination may not be clear and importers may wish to
    seek legal counsel regarding adequacy of valuation and ability to defend the claim upon CBP request.
  • Reminder that CBP instructed importers to pay the Section 232 duty against the full value of the product if the importer cannot determine the weight and value of the metal content. If the importer can determine the value at a later time, a PSC can be filed, subject to the broker’s post-entry fee.

The information presented here is based on information CBP is publishing and our understanding of the requirements. Importers need to validate requirements as it relates to their products and seek additional guidance, including legal counsel, as necessary to declare entries. Please reach out to your Schenker contact for questions.