CBP Issues Guidance on New Threshold for Deactivating Section 232 Exclusions
Effective February 15, 2024, Customs and Border Protection (CBP) will begin deactivating Section 232 exclusions when they reach 95 percent of their permitted quantities. They expect this will allow them to better control oversubscription of the permitted quantities than at the current 100 percent threshold for deactivation.
The initiative comes as a result of a Government Accountability Office (GAO) report that concluded importers have underpaid Section 232 duties by more than $29 million as a result of entering quantities of steel and aluminum beyond the allocated quantities.
The following Section 232 exclusions will be deactivated at the 95 percent threshold:
- Exclusions for non-quota countries, i.e. those subject to Section 232 duties
- Exclusions for European Union (EU) countries that are subject to Section 232 steel tariff rate quotas (TRQs)
- Exclusions valid for multiple countries subject to both Section 232 duties and any quotas
After an exclusion is deactivated, an importer must pay the full Section 232 duties to import affected merchandise. To claim the additional allocated quantity, an importer must file a Post Summary Correction (PSC) to request a refund. For exclusions that are valid for multiple countries subject to both Section 232 duties and quotas, importers can only file a PSC for the Section 232 duty countries, or the EU steel tariff rate quotas.
Some Section 232 exclusions will remain at 100 percent threshold for deactivation because importers are not able to use a PSC to claim remaining amounts. These include absolute quotas from Argentina, Brazil, and South Korea; and tariff rate quota from Japan and UK.
Please reach out to your Schenker contact if you have any questions.
Link to CBP CSMS # 58942510 – GUIDANCE: New Threshold for Deactivating Section 232 Exclusions.