The U.S. and European Union (E.U.) have reached an agreement to institute a tariff-rate quotas (TRQ) system to exempt imports of E.U. steel and aluminum from 25% and 10% Section 232 duties, respectively, beginning January 1, 2022. Presidential Proclamations 10327 and 10328 (scheduled for publication in the Federal Register on January 3, 2022) provide details of the TRQ system for imports of steel and aluminum from the 15 E.U. member countries, namely Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia (Czech Republic), Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden. 

The TRQs are effective for E.U. steel and aluminum entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on January 1, 2022. The TRQs are “first-come, first-served,” and once a TRQ is filled, the over-quota duties apply. The steel Proclamation includes guidance for foreign-trade zone (FTZ) on-hand inventory of E.U. steel and aluminum in Privileged Foreign (PF) status before January 1, 2022 and entered thereafter. Due to uncertainty with TRQ limits and for E.U. steel and aluminum imported on or after January 1, 2022 and destined for FTZs, we recommend the following: 

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FOR IMMEDIATE ACTION BY FTZ CLIENTS

 

  • For clients with FTZ on-hand inventory of E.U. steel or aluminum for storage (not FTZ production) with PF election dates before January 1, 2022, file Customs entry as soon as possible while E.U. country-specific TRQ remains open.
  • For FTZ clients with FTZ on-hand inventory of E.U. steel or aluminum for FTZ production with PF election dates before January 1, 2022, contact the firm to discuss options.
  • For FTZ clients with E.U. steel and aluminum arriving on or after January 1, 2022, file consumption entry if E.U. country-specific TRQ remains open and admit in Domestic zone status, rather than admitting into the FTZ in PF status to eliminate risk.

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E.U. steel must be melted and poured in the E.U. to be eligible for in-quota treatment without Section 232 duties and is provided for in 54 quota categories for each E.U. member country. E.U. aluminum is provided in 16 quota categories for each E.U. member country. Importers will be required to provide a Certificate of Analysis for each aluminum product, as currently required by CBP Regulations. 

Although TRQ amounts are calculated annually for each E.U. country, they are administered on a quarterly and country-specific basis. The E.U. steel and aluminum TRQs will remain in place through December 23, 2023. E.U. derivative articles of steel and aluminum will not be subject to Section 232 duties effective January 1, 2022.

The Section 232 product exclusion process remains with some changes. Approved product exclusions exempt E.U. steel and aluminum from Section 232 duties, and importers may still seek additional product exclusions. The United States will renew for 2 calendar years all steel product exclusions that were granted and utilized to import steel products from the E.U. during Fiscal Year 2021. General Approved Exclusions (GAE) may also be utilized, but 30 GAEs were just revoked effective December 27, 2021. Commerce will publish the volume of steel imports under product exclusions. The Secretary of Commerce will open a comment period on the product exclusion process, and establish a process to assist U.S. steel and aluminum consumers in identifying E.U. suppliers.

Any imports of steel and aluminum articles from E.U. member countries admitted into an FTZ in PF zone status prior to 12:01 a.m. eastern standard time on January 1, 2022, shall be subject upon entry for consumption made on or after 12:01 a.m. eastern standard time on January 1, 2022, to the provisions of the TRQ in effect at the time of the entry for consumption.

Customs has issued a collection of guidance documents:

  •  CSMS #50536108 on E.U. Steel Tariff-Rate Quota Q1 and Q2 2022, with guidance on TRQ processing such as:
  • entries submitted prior to 8:30 am ET and on January 3, 2022 will be counted in the first opening at 8:30 am ET, and
  • for quota shipments to be processed on the same day, the Entry Summary must be filed, Entry Summary payment date must be on file or scheduled for a future statement, and the conveyance arrived by 4:30 pm in the port of unlading’s local time zone. 
  •  Quota Bulletin QB 22-801 Q1 and Q2 2022 E.U. Steel TRQ with TRQ guidance including:
  • Table of Q1 and Q2 2022 country-specific steel TRQ limits.
  • CSMS #50535869 on E.U. Aluminum TRQ 2022.
  • Quota Bulletin QB 22-901 2022 E.U. Aluminum First and Second Period TRQ.
  • Table of 2022 country-specific aluminum TRQ limits.
  • CSMS #50536327 Guidance on EU Section 232 Aluminum and Steel TRQ and Exempting EU from Derivative Duties, which includes specific FTZ guidance:
  • Prior Presidential Proclamations require E.U. aluminum and steel to be admitted into FTZs in PF status. 
  • E.U. aluminum and steel admitted in FTZs in PF status prior to January 1, 2022 shall be subject upon consumption entry on or after January 1, 2022, to the provisions of the TRQ in effect at the time of the entry.
  • Customs indicates that “special instructions” apply for PF status E.U. steel and aluminum admitted before January 1, 2022 and entered thereafter.

The E.U. TRQ guidance is complex, and questions remain on a variety of subjects including how quickly particular country-specific TRQ limits will fill up, the mechanics of quota entry filing and product exclusions, and the treatment of E.U. steel and aluminum admitted into FTZs on or after January 1, 2022. The firm is working with the National Association of Foreign Trade Zones (NAFTZ) to clarify the treatment of E.U. steel and aluminum stored and manufactured in FTZs. 

Please contact Marshall Miller, Brian Murphy, Sean Murray, or Bryan Brown with questions or for assistance.