CSMS Message: 02-000401

TO : ALL ABI BROKERS.

FROM : JOHN LEONARD

DATE : 03/20/2002

TO : DIRECTORS, FIELD OPERATIONS

FROM : EXECUTIVE DIRECTOR, TRADE PROGRAMS
OFFICE OF FIELD OPERATIONS

SUBJECT : INFORMATION NOTICE FOR ALL FILERS, STEEL IMPORTERS
AND OTHER INTERESTED PARTIES RELATING TO
INCREASED TARIFFS FOR SOME STEEL PRODUCTS

BACKGROUND

ON DECEMBER 19, 2001, THE UNITED STATES INTERNATIONAL TRADE
COMMISSION (ITC) TRANSMITTED TO THE PRESIDENT A REPORT ON ITS
INVESTIGATION OF THE TRADE ACT OF 1974, AS AMENDED (THE
"TRADE ACT") (19 U.S.C. 2252), WITH RESPECT TO IMPORTS OF
CERTAIN STEEL PRODUCTS.

THE ITC REACHED AFFIRMATIVE DETERMINATIONS UNDER SECTION
202(B) OF THE TRADE ACT THAT SOME STEEL PRODUCTS ARE BEING
IMPORTED INTO THE UNITED STATES IN SUCH INCREASED QUANTITIES
AS TO BE A SUBSTANTIAL CAUSE OF SERIOUS INJURY, OR THREAT OF
SERIOUS INJURY, TO THE DOMESTIC INDUSTRIES PRODUCING LIKE OR
DIRECTLY COMPETITIVE ARTICLES. OF THE 33 PRODUCT CATEGORIES
REVIEWED, 16 WERE FOUND TO BE HARMFUL.

ON MARCH 5, 2002, THE PRESIDENT SIGNED INTO EFFECT A
COMPREHENSIVE RELIEF PROGRAM ON STEEL IMPORTS, MOSTLY IN THE
FORM OF 30 PERCENT TARIFFS (WITH SOME SMALLER INCREASES) AND
A QUOTA ON SLAB PRODUCTS. THIS NOTICE IS TO ADVISE THE STEEL
IMPORTING COMMUNITY THAT THE REMEDY WILL GO INTO EFFECT ON
MARCH 20, 2002 AT 12:00 A.M. EST.

STEEL IMPORTS HAVE BEEN UNDER A WHITE HOUSE REQUESTED
INVESTIGATION BY THE INTERNATIONAL TRADE COMMISSION FOR OVER
A YEAR NOW, WITH REPORTS, DISCUSSION, NEGOTIATIONS, PETITIONS
AND CONSULTATIONS WITH DOMESTIC PRODUCERS, IMPORTERS AND
IMPORT ORGANIZATIONS, DOMESTIC AGENCIES, POLITICAL
REPRESENTATIVES, FOREIGN GOVERNMENTS, FOREIGN PRODUCERS AND
THE MEDIA. THEREFORE, CUSTOMS EXPECTS IMPORTERS AND FILERS
TO EXHIBIT A HIGH LEVEL OF REASONABLE CARE AND HIGH
COMPLIANCE WITH THE NEW IMPORT REQUIREMENTS ON STEEL.

- 2 -

1. DUTY RATES

DETAILED INFORMATION CONCERNING THE STEEL SECTION 201 REMEDY
IS POSTED ON THE UNITED STATES TRADE REPRESENTATIVE WEBSITE
AT WWW.USTR.GOV. THE MOST IMPORTANT REFERENCE MATERIAL IS
THE ANNEX TO THE HTS CHAPTER 99, WHICH SHOWS SPECIFIC DETAILS
CONCERNING THIS REMEDY. IMPORTERS AND FILERS SHOULD REVIEW
THIS DOCUMENT CAREFULLY BEFORE MAKING ENTRY ON OR AFTER MARCH
20TH.

TO SUMMARIZE THE KEY POINTS OF THE ANNEX, IMPORTERS AND
FILERS WILL CONTINUE TO CLASSIFY THEIR STEEL IMPORTS UNDER
CHAPTERS 72 AND 73, AS THEY DID PRIOR TO THE REMEDY.
HOWEVER, THE NEW CHAPTER 99 HTS NUMBERS WILL NOW BE REFLECTED
AS THE PRIMARY HTS FOR MOST STEEL IMPORTS, WITH THE CHAPTER
72 OR 73 HTS REFLECTED AS THE SECONDARY NUMBER.

THE PRESIDENTIAL PROCLAMATION COVERS 14 PRODUCT CATEGORIES
THAT REPRESENT THOUSANDS OF SPECIFIC STEEL PRODUCTS.

* MOST PRODUCTS ARE COVERED BY 30 PERCENT TARIFFS, WITH
A SMALLER NUMBER RANGING FROM 8-15 PERCENT.
* ONE REGIONAL TARIFF RATE QUOTE (TRQ) ON SLAB PRODUCTS
IMPOSING A 30 PERCENT DUTY INCREASE ONCE THE QUOTA
IF FILLED FOR A SPECIFIC COUNTRY OR REGION.
* ALL DUTY RATES REDUCE ANNUALLY OVER A PERIOD OF 3
YEARS, DEPENDING ON THE CATEGORY.

2. EXCLUSIONS

* CANADA, MEXICO, ISRAEL AND JORDAN ARE EXCLUDED FROMTHE
* REMEDY 99 "DEVELOPING COUNTRIES" ARE ALSO EXCLUDED, WITH
SOME HTS SPECIFIC EXCEPTIONS.
* NUMEROUS PRODUCT SPECIFIC EXCLUSIONS, WITH NEW CHAPTER
99 HTS NUMBERS.
* ADDITIONAL PRODUCT EXCLUSIONS MAY BE ADDED TO THE LIST
AS THE APPLICATIONS ARE REVIEWED BY THE USTR.
* THE TRADE IS REQUIRED TO PRESENT MILL CERTIFICATES AND
OTHER SUPPORTING DOCUMENTS TO SUBSTANTIATE ANY CLAIMS
FOR EXCLUSION BY PRODUCT OR COMMODITY.

3. EXAMPLES OF EXCLUSIONS

THE FOLLOWING ARE THREE SCENARIOS DESCRIBING THE MOSTPROBABLE
IMPORT SITUATIONS:

- 3 -

A. EXCLUSIONS BY COUNTRY - STEEL ORIGINATING FROM AN
EXCLUDED COUNTRY LISTED IN NOTE 11(D) OF CHAPTER 99,
DOES NOT REQUIRE A HTS NUMBER FROM CHAPTER 99. THE
CHAPTER 72 OR 73 HTS NUMBER WILL BE REPORTED, ALONG
WITH THE COUNTRY OF ORIGIN INFORMATION QUALIFYING THE
GOODS FOR EXCLUSION FROM THE REMEDY.

B. EXCLUSIONS BY PRODUCT STEEL ORIGINATING FROM A
COUNTRY NOT EXCLUDED FROM THIS REMEDY, BUT IT IS
LISTED AS ONE OF THE SPECIFIC PRODUCT EXCLUSIONS IN
NOTE 11(B) OF CHAPTER 99, YOU MUST USE THE HEADING
9903 HTS THAT CORRESPONDS TO YOUR SPECIFIC PRODUCT IN
ORDER TO AVOID PAYING THE HIGHER RATE OF DUTY. THE
CORRESPONDING CHAPTER 72 OR 73 HTS MUST BE USED AS THE
SECONDARY HTS NUMBER. ALSO NOTE THAT THE "X" NUMBER
IN THE CHAPTER NOTES AND HTS DESCRIPTIONS CORRESPONDS
TO THE EXCLUSION SUBMISSIONS DETAILED ON THE USTR
WEBSITE.

C. GOODS NOT EXCLUDED BY COUNTRY OR NOT LISTED AS ONE
OF THE SPECIFIC EXCLUDED PRODUCTS - YOU MUST USE THE
APPROPRIATE HEADING 9903 NUMBER LISTING THE INCREASED
DUTY RATE, IN COMBINATION WITH THE APPROPRIATE CHAPTER
72 OR 73 HTS NUMBER.

4. STEPS FOR FILING AN ENTRY AND PAYMENT OF DUTIES

ENTRIES CAN BE FILED USING THE ABI SYSTEM, BUT YOUR SYSTEMS
WILL ONLY BE ABLE TO ACCOMPLISH THIS IF YOU HAVE PROGRAMMED
IN ALL OF THE NEW 99 NUMBERS.

A. ABI ENTRIES

* ENTRY WILL NOT BE IN AN ACCEPT STATUS UNTIL ALL
PAYMENTS HAVE BEEN COLLECTED.
* AS THE MONEY COMES IN ON THE DEFERRED DATE,
ENTRY WILL COLLECT AS ADDITIONAL DUTIES AGAINST
THE ENTRY NUMBER.
* ADDITIONAL DUTY (201) SHOULD BE REFERENCED ON
THE 7501 BUT WILL NOT BE PAID INITIALLY. THE DUTY
WILL BE DEFERRED FOR THE FOLLOWING PERIOD:

1) THE FILER MUST DEFER UNTIL APRIL 19, 2002, THE DEPOSIT OF
THE ESTIMATED CUSTOMS DUTIES DESCRIBED IN THE PROCLAMATION ON
THOSE PRODUCTS ENTERED, OR WITHDRAWN FROM WAREHOUSE FOR
CONSUMPTION IN THE CUSTOMS TERRITORY OF THE UNITED STATES ON
OR AFTER 12:01 A.M., EST, MARCH 20, 2002, AND UP TO APRIL 4,
2002.

A) THE ADDITIONAL DUTY WILL BE REFERENCED ON THE 7501, BUT
NOT COLLECTED INITIALLY
B) NO INTEREST WILL BE COLLECTED ON THE DUTY DEFERRAL

* MILL CERTIFICATES WILL BE PRESENTED WITH EVERY
ENTRY SUMMARY. IF CLAIMING AN EXCLUSION,
ADDITIONAL SUPPORTING DOCUMENTATION SHOULD
SUBSTANTIATE THE CLAIM FOR EXCLUSION BY PRODUCT OR
COMMODITY.
* CHAP 72 73 ENTRIES WILL HAVE A CORRESPONDING
99 HTS AS NEEDED.
* AS THE MONEY COMES IN ON THE DEFERRED DATE,
ENTRY WILL COLLECT AS ADDITIONAL DUTIES AGAINST
THE ENTRY NUMBER. THIS WILL REMOVE THE ENTRY FROM
THE UNPAID-REJECT REPORT AND PUT THE ENTRY INTO AN
ACCEPTED STATUS.
* ONE CHECK CAN BE SUBMITTED FOR MULTIPLE
ENTRIES. THE BROKER/IMPORTER WILL PROVIDE A COVER
LETTER ITEMIZING THE BREAKDOWN OF EACH ENTRY THAT
THE CHECK APPLIES TO AND WHAT AMOUNTS ARE TO BE
APPLIED TO EACH. AN EXAMPLE FOLLOWS:

EXAMPLE:
ENTRY NUMBER123-1234567
$ 2,500.00APPLICABLE DUTIES CHAPTER 72 AND 73
$25.00 MPF
$35.00 HMF
$10,000.00 (201 DUTY)
$12,560.00TOTAL

* WHEN 201 DUTIES ARE TENDERED, ENTRY WILL
COLLECT THE MONEY AS ADDITIONAL DUTIES AGAINST THE
ENTRY NUMBER, RETRIEVE THE ORIGINAL ENTRY SUMMARY
FROM THE IMPORT SPECIALIST AND ATTACH A COPY OF
THE COVER LETTER TO THE APPROPRIATE ENTRIES
* IF 201 DEFERRED DUTY PAYMENTS ARE NOT
RECEIVED BY APRIL 19TH, ENTRY WILL ISSUE
LIQUIDATED DAMAGES.

B. NON-ABI ENTRIES

* THE ENTRY SECTION WILL BE MANUALLY ROUTING
ALL NON-ABI ENTRIES EACH DAY AND SORTING OUT THE
CHAPTER 72 AND CHAPTER 73 ENTRIES. THESE ENTRIES
WILL BE IMMEDIATELY ROUTED/DELIVERED TO THE
APPROPRIATE IMPORT SPECIALIST TEAM. FLAGGING
THESE ENTRIES WILL HELP WITH THE DISSEMINATION OF
ENTRIES.
* IF ONE CHECK IS SUBMITTED FOR MULTIPLE ENTRIES,
YOU WILL PROVIDE A COVER LETTER ITEMIZING THE
BREAKDOWN AS FOLLOWS:

EXAMPLE:
ENTRY NUMBER123-1234567
$ 2,500.00APPLICABLE DUTIES CHAPTER 72 AND 73
$ 25.00 MPF
$ 35.00 HMF
$10,000.00 (201 DUTY)
$12,560.00TOTAL

* WHEN 201 DEFERRED DUTIES ARE TENDERED,
ENTRY WILL COLLECT THE MONEY AS ADDITIONAL DUTIES
AGAINST THE ENTRY NUMBER, RETRIEVE THE ORIGINAL
ENTRY SUMMARY FROM THE IMPORT SPECIALIST AND
ATTACH A COPY OF THE COVER LETTER TO THE
APPROPRIATE ENTRIES.
* IF 201 DEFERRED DUTY PAYMENTS ARE NOT
RECEIVED BY APRIL 19TH, ENTRY WILL ISSUE
LIQUIDATED DAMAGES.

C. QUOTA ENTRIES

THE COMPREHENSIVE RELIEF PROGRAM ON STEEL IMPORTS
ESTABLISHES A TEMPORARY TARIFF RATE QUOTA ON STEEL
SLABS OTHER THAN THOSE MADE OF STAINLESS STEEL OR TOOL
STEEL PROVIDED FOR IN CHAPTER 99 SUBCHAPTER III OF THE
HTSUS. THE QUOTA IS IN EFFECT FOR 3 YEARS PLUS ONE
DAY COMMENCING ON MARCH 20, 2002.

THERE IS A TARIFF-RATE QUOTA ON SEMI-FINISHED SLABS
UNDER HEADING 9903.72.30 THROUGH 9903.72.48.
SHIPMENTS SUBJECT TO THE QUOTA SHOULD BE ENTERED AS
ENTRY TYPE "02, 07, 12, 23 OR 38" AND WITH THE
APPROPRIATE HEADING 9903 AND CHAPTER 72 HTS NUMBERS.
CARE SHOULD BE TAKEN TO MONITOR THE WEEKLY QUOTA
BULLETINS ON THE CUSTOMS ELECTRONIC BULLETIN BOARD ON
THE CUSTOMS WEBSITE AT WWW.CUSTOMS.GOV.

INFORMATION ON QUOTA ENTRIES CAN BE FOUND ON QBT
NOTICE #2002-516 ENTITLED "ESTABLISHMENT OF TARIFF
RATE QUOTA (TRQ) ON CARBON AND ALLOY STEEL SLABS AND
OPENING OF QUOTA PERIOD".

5. FOREIGN TRADE ZONES

IN ORDER TO ESTABLISH INCREASES IN DUTY AND A TARIFF RATE
QUOTA ON IMPORTS OF CERTAIN STEEL PRODUCTS DESCRIBED IN
PARAGRAPH 7 (OTHER THAN EXCLUDED PRODUCTS), SUBCHAPTER
III OF CHAPTER 99 OF THE HTS IS MODIFIED AS PROVIDED IN
THE ANNEX TO THE PROCLAMATION. ANY MERCHANDISE SUBJECT
TO A SAFEGUARD MEASURE THAT IS ADMITTED INTO U.S. FOREIGN
TRADE ZONES ON OR AFTER MARCH 20, 2002 MUST BE ADMITTED
AS "PRIVILEGED FOREIGN STATUS" AS DEFINED IN 19 CFR
146.41 AND WILL BE SUBJECT UPON ENTRY TO ANY QUANTITATIVE
RESTRICTIONS OR TARIFFS RELATED TO THE CLASSIFICATION
UNDER THE APPLICABLE HTS SUBHEADING.

6. REQUESTS FOR CLASSIFICATION AND COUNTRY OF ORIGIN
RULINGS

IN ORDER TO BE CERTAIN OF THE CLASSIFICATION OF THEIR
GOODS, CORRECT COUNTRY OF ORIGIN RELATED TO PROCESSING,
OR WHETHER GOODS QUALIFY FOR EXCLUSION, IMPORTERS SHOULD
FOLLOW CUSTOMS BINDING RULING POLICY AND REQUEST A RULING
ON THEIR MERCHANDISE.

ALL REQUESTS FOR CLASSIFICATION RULINGS SHOULD BE
ADDRESSED TO:

U.S. CUSTOMS SERVICE
ONE PENN PLAZA, 10TH FLOOR
NEW YORK, NY 10119
ATTN: PAULA ILARDI, NIS
(646) 733-3020

7. ENFORCEMENT

CUSTOMS EXPECTS A HIGH LEVEL OF REASONABLE CARE AND
COMPLIANCE. THE CURRENT STEEL REMEDY DOES NOT SUPERCEDE
OR CANCEL ANY EXISTING REMEDY SUCH AS QUOTAS,
ANTI-DUMPING OR COUNTERVAILING DUTIES, NOR DOES IT
SUPERCEDE THE EXISTING DUTY RATES LISTED IN CHAPTER 72
AND 73 OF THE HTSUS. ALL SUCH DUTIES, FEES AND
COLLECTIONS ARE CUMULATIVE.

PLEASE ENSURE THAT BOND GUIDELINES ARE REVIEWED AND THAT
ADEQUATE BOND COVERAGE EXISTS FOR EACH OF YOUR ENTRIES.

8. INFORMATION DISSEMINATION

ADDITIONAL INFORMATION WILL BE POSTED TO THE CUSTOMS
WEBSITE AT WWW.CUSTOMS.GOV, AS IT BECOMES AVAILABLE.

9. ACTION

PLEASE PASS TO ALL FILERS, STEEL IMPORTERS AND OTHER
INTERESTED PARTIES. A SEPARATE NOTICE HAS BEEN SENT THE
FIELD WITH SPECIFIC PROCESSING INSTRUCTIONS.

SHOULD YOU HAVE ANY QUESTIONS REGARDING THIS INITIATIVE,
PLEASE CONTACT YOUR LOCAL IMPORT SPECIALIST. IF YOU NEED
ADDITIONAL HELP, PLEASE CONTACT PATRICIA FITZPATRICK AT (202)
927-1106 OR DEBBIE SCOTT AT (202) 927-1962.

/S/

ELIZABETH G. DURANT

REFERENCE MATERIAL

LIST OF TOPICS ON USTR WEBSITE RELATED TO STEEL
HTTP://WWW.USTR.GOV/SECTORS/INDUSTRY/STEEL201/BACKGROUND.HTM

PRESIDENTIAL PROCLAMATION
HTTP://WWW.WHITEHOUSE.GOV/NEWS/RELEASES/2002/03/20020305-7.HTML

ANNEX TO THE PRESIDENTIAL PROCLAMATION
HTTP://WWW.USTR.GOV/SECTORS/INDUSTRY/STEEL201/2002-03-05-ANNEX.PDF

STEEL REMEDY LIST
HTTP://WWW.USTR.GOV/SECTORS/INDUSTRY/STEEL201/2002-03-05-201REMEDY.PDF

DEVELOPING COUNTRIES EXCLUDED/NOT EXCLUDED FROM REMEDY LIST
HTTP://WWW.USTR.GOV/SECTORS/INDUSTRY/STEEL201/2002-03-05-EXCLUSIONS.PDF

COMPONENTS OF THE PRESIDENTS DECISION
HTTP://WWW.USTR.GOV/SECTORS/INDUSTRY/STEEL201/2002-03-05-BACKGROUND.PDF