ARTICLE
16 April 2012

Renewed MTB Means Opportunity For Exemption From Import Duties

SJ
Steptoe LLP

Contributor

In more than 100 years of practice, Steptoe has earned an international reputation for vigorous representation of clients before governmental agencies, successful advocacy in litigation and arbitration, and creative and practical advice in structuring business transactions. Steptoe has more than 500 lawyers and professional staff across the US, Europe and Asia.
Two committees of the United States Congress recently announced the opportunity to participate in a possible Miscellaneous Tariff Bill ("MTB"), which would collect requests for temporary reduction or cancellation of import duties on specific products.
United States International Law
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Two committees of the United States Congress recently announced the opportunity to participate in a possible Miscellaneous Tariff Bill ("MTB"), which would collect requests for temporary reduction or cancellation of import duties on specific products.  Participation in the MTB process can substantially reduce costs for companies that purchase goods subject to import duties.  Interested companies should act quickly since any MTB request for an import duty exemption must be written and presented to a Senator or Member of Congress in time to be submitted as a proposed bill by April 30, 2012.

On March 30, 2012, both the House Ways and Means Committee and the Senate Finance Committee announced the opportunity for Members of Congress and Senators to submit bills to be part of the MTB process.  For many years, Congress has used the MTB process to collect requests for product-specific exemptions from import duties.  Once passed into law, these exemptions serve to reduce costs for US manufacturers and consumers.  These duty-free exceptions usually last a few years but, once established, they can be, and often are, renewed.  During recent past Congresses, the MTB process has not been used every year or has been used only to renew existing duty-free treatment, without consideration of new products for duty-free treatment.  In light of this history, Congress' new announcement presents an especially valuable opportunity since it appears that companies will be able both to renew existing duty exemptions and to request new exemptions.  If the final MTB is passed, an exemption requested this month likely would come into force before the end of 2012.

In order to be approved for inclusion in the MTB, a duty exemption request must:

  1. not be contested by a US entity after the requests are published by Congress;
  2. cause a total reduction in duties not greater than $500,000 per product, per year; and
  3. describe a specific item or product -- rather than a general category or intended use -- that can be identified by US Customs upon arrival.

A company can request duty-free treatment on multiple products, as long as each product meets all three rules above.  There are specific forms to be used and format requirements, all described in the links below.  After submission by Senators and Members of Congress ot the appropriate Committees, the duty exemption requests will be listed by Congress for public comment and will be reviewed by multiple federal agencies to ensure that all necessary conditions are met.

For any company that has specific products on which it pays import duties or higher prices because of duties, the MTB process can be a highly effective cost-reduction tool.  However, to be included in this opportunity, action must be taken in time to meet the newly-announced deadline of April 30, 2012.  In light of Congress' recent MTB history, a similar opportunity may not arise again in the very near future.

House announcement:
http://waysandmeans.house.gov/News/DocumentSingle.aspx?DocumentID=288285

Senate announcement:
ttp://finance.senate.gov/newsroom/chairman/release/?id=e0e22872-699a-4747-9970-f360e4d96e1d

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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