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Importing Under COVID-19: Some Resources and Relief for Medical Supplies, But No Universal Duty Deferral

To facilitate the importation of personal protective equipment (PPE) and other medical supplies responsive to the novel coronavirus disease (COVID–19) pandemic, the government continues to waive some tariffs, but balks on broad relief.

CBP Launches COVID–19 Site, Establishes Medical Supplies Team

As the customs landscape rapidly changes in light of the virus, on April 1, 2020, US Customs and Border Protection unveiled new resources for the trade community (CSMS 42231420), centralized in a CBP COVID–19 Updates and Announcements website. The site will include any relevant information from CBP, as well as from the US Food and Drug Administration (FDA) and other partner government agencies (PGAs) that regulate the importation of PPE and other COVID–19 medical supplies.

One of these resources is CBP’s Pharmaceuticals, Health, and Chemical Center of Excellence and Expertise (CEE) COVID–19 Cargo Resolution Team (CCRT), established to assist and to coordinate among the trade, ports, and PGAs to expedite the release of these goods. Importers are encouraged to contact CCRT at COVID19_RELIEF_IMPORTS@cbp.dhs.gov regarding facilitation requests from PGAs or private industry and general inquiries regarding the import of COVID–19 medical supplies and include as much data about the shipment as possible.

CBP provided a chart listing by tariff classification products it considers to be COVID–19 medical supplies, consisting of certain test kits and diagnostic test instruments and apparatus, protective garments, thermometers, disinfectant and sterilization products, other medical devices, and medical consumables.

CBP and FDA Issue Updated Guidance for Importing COVID–19 Supplies

On Sunday, April 5, CBP sent FDA entry information guidance (CSMS 42272898) for importing COVID–19 supplies updating the earlier guidance about which Arent Fox recently wrote. The update explains that for ventilators authorized for emergency use pursuant to an Emergency Use Authorization (EUA), importers should submit the product code according to the Ventilator EUA, and continue to transmit Intended Use Code (IUC) 940.000.

New enforcement discretion policies have also been issued for Clinical Electronic Thermometers, Gowns, Other Apparel, and Gloves, and Sterilizers, Disinfectant Devices and Air Purifiers related to COVID–19, which are regulated by FDA as a device but not authorized by an EUA. Importers should continue to transmit IUC 081.006. Under both IUCs, affirmations of compliance are optional in ACE.

Additionally, CBP issued an advisory (CSMS 42253103) encouraging importers to use the FDA Import Trade Auxiliary Communication System (ITACS) for current entry status and to receive FDA notices electronically for COVID–19 products. ITACS accounts can be requested via the FDA Unified Registration and Listing System (FURLS)

Section 301 Duties: New Medical Products Exclusions Issued, Comment Period Open for Additional Exclusions

As we previously alerted, some importers of Chinese COVID–19 medical supplies are seeing relief from Section 301 duties, as USTR says it has accelerated review of exclusion requests for such products already pending with the office and opened up a new comment period for exclusion requests.

Two recent rounds of exclusions cover certain COVID–19 medical supplies. The eleventh round of List 3 exclusions published March 26 (85 FR 17158) and the third round of List 4A exclusions published March 31 (85 FR 17936) include plastic wound coverings and medicine pouches, textile ice bags and identification bands, urology drain bags, and certain medical wrist bands. USTR had already issued three rounds of exclusions from Lists 3 and 4A for PPE and other COVID–19 medical supplies. Many non-medical products, such as certain smartwatches, are included in the new exclusions as well.

Meanwhile, USTR has issued a FAQ sheet on its separate request for comments (85 FR 16987) on the removal of Section 301 tariffs from any essential Chinese products. The FAQ sheet reminds interested persons, which might include “producers, importers, purchasers, or users of the product in question,” to comment on whether any product subject to the Section 301 tariff “is needed for” or “relevant to” the “medical and public health-related response to the COVID–19 outbreak.” It also introduces a new direction not found in the Federal Register notice to address whether removal “would affect the availability of the product.”

Comments are currently due at docket number USTR-2020-0014 no later than June 25, 2020, but should be submitted as promptly as possible. A product is eligible for this COVID–19 exclusion whether or not a list-based exclusion request has been denied, is pending, or was never filed.

Duty Deferral Still out of Reach

As reports say that the White House continues privately to deliberate a general duty deferral program as a measure of cash-flow relief for importers, the Administration’s public rejection of the idea leaves unclear whether such a plan, in fact, will be announced.

Since our earlier alert on this topic, officials told The Wall Street Journal and Bloomberg News on background that President Trump had approved an executive order allowing importers to defer payment of estimated most-favored-nation (MFN) duties, taxes, and fees, which ordinarily are due upon entry, for ninety days. The deferral would not apply to Section 301, antidumping and countervailing, or other special duties, and all charges would be owed at the end of the deferral period.

Subsequently, however, President Trump denied that any deferrals had been agreed to, indicating that such action would not be taken without his approval. And in an interview Friday, April 3, National Economic Council Director Larry Kudlow tried to put the rumors to bed, explaining that the Administration concluded that the deferral “was too complicated” and “might send the wrong signal in terms of the president’s trade policy.”

On March 20, CBP had said it would consider individual requests for duty deferral due to issues arising from the COVID–19 emergency (CSMS 42097586) but withdrew this guidance the following week (CSMS 42161666). Canada has implemented a deferral through June.

Lawmakers have been split on the plan. While Senate Finance Committee Republicans have written in support, as has a bipartisan group led by Senators Diane Feinstein (D-CA) and Pat Toomey (R-PA), on Wednesday, April 1, Sherrod Brown (D-OH) asked Ambassador Robert Lighthizer to abandon it. Senator Brown expressed concern that “blanket deferral of duties on products unrelated to the coronavirus effort,” and “on finished apparel and textile products, in particular,” will undermine the efforts of American manufacturers who have recently shifted production to vital PPE and medical supplies. The Senator did, however, applaud the Section 301 exclusions for COVID–19 medical supplies.

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