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CBP Issues Guidance on How to Obtain Sections 301 and 201 Refunds

On February 8, 2019, U.S. Customs and Border Protection (CBP) issued two guidance notices detailing how importers may obtain refunds related to Section 301 and Section 201 duties. One notice details how importers may submit refunds claims for duties paid on products from China that were subject to Section 301 tariffs, but were subsequently excluded through the U.S. Trade Representative’s (USTR) product exclusion process. The other notice details how importers may submit drawback claims with regard to Section 301 and 201 duties.

Submitting Refunds for Products Excluded from Section 301 Duties

On December 28, 2018, USTR published a Federal Register notice of certain List 1 products from China that are excluded from the Section 301 additional duties. Notably, the exclusions are available to any importer whose Chinese-origin imports meet the product-specific description of the merchandise as provided in the notice, whether or not the importer filed an exclusion request.

As the exclusions are retroactive on imports from July 6, 2018, importers may file a Post Summary Correction to obtain a refund on unliquidated entries. For liquidated entries, an importer should file a formal administrative protest.

In order to obtain a refund of duties that have already been paid, importers must report HTSUS subheading 9903.88.05 which provides for “Articles of the product of China, as provided for in U.S. note 20(g) to this subchapter, each covered by an exclusion granted by the U.S. Trade Representative,” in addition to the HTSUS subheading under which the product is regularly classified.

It is also worth highlighting that imports from China granted a product exclusion, and therefore, not subject to Section 301 duties, are not covered by the Foreign Trade Zone provisions of the Section 301 Federal Register notice requiring zone admission in privileged foreign (PF) status. Instead, such admissions are subject to the normal FTZ provisions in 19 CFR Part 146.

Drawback Claims Regarding Sections 301 and 201 Duties

CBP announced that filers now have the ability to submit drawback claims related to Sections 301 and 201 duties. In order to file such a claim, filers should provide the Chapter 99 HTSUS subheading related to the particular Section 301 or Section 201 duties, along with the regular subheading classification for the particular product.

If any Sections 301 or 201 drawback claims have previously been filed, the filer should perfect the claim by contacting the filer’s Drawback Specialist and requesting that the claim be returned to trade control. The filers should then list both HTSUS subheadings as detailed above and resubmit the claim within five (5) days.

Sections 301 and 201 duties are refundable in full for pre-Trade Facilitation and Trade Enforcement Act (TFTEA) substitution drawback claims. CBP has stated that for TFTEA claims, Sections 301 and 201 duties are refundable “even if subject to the TFTEA lesser of [value] rule.” For such claims, “the amount will be limited by the value of the substituted merchandise when it is lower than the value of the imported merchandise.”

Further, for NAFTA drawback claims, both pre- and post-TFTEA duties may be refundable “subject to the lesser of [duty] rule, but only when the total amount of Canadian/Mexican duties is higher than the total amount of duties paid in the United States.” For these claims, the duties refunded “will be limited by the amount of duties paid on the merchandise imported into Canada/Mexico.”

© 2023 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.National Law Review, Volume IX, Number 43

About this Author

Kathleen Murphy, International trade Lawyer, Drinker Biddle

Kathleen M. Murphy counsels clients on maximizing trade benefits, making informed global procurement decisions and developing domestic and international trade compliance programs. She represents clients in duty-recovery initiatives and customs challenges concerning tariff classification, valuation, Free Trade Agreements and country of origin determinations, among other areas. She guides clients through compliance audits and validations, as well as penalty investigations conducted by U.S. or foreign customs authorities. She also represents clients in...

James Sawyer Trade Attorney Faegre Drinker Biddle & Reath Chicago, IL

James Sawyer counsels clients on critical import compliance issues and duty-savings opportunities, balancing business realities with effective internal control processes to meet importers’ legal obligations. He advises in all areas of U.S. import law and regulation, including tariff classification, valuation, origin determination and marking, free trade agreements and duty preference programs, and enforcement. James is a co-leader of Faegre Drinker's Chicago team.

Import Compliance Counsel

James frequently counsels clients on strategic sourcing and import compliance issues...

William Rucker, Drinker Biddle Law Firm, International Trade and Customs Specialist

William R. “Randy” Rucker assists clients with all aspects of U.S. Customs law, including the classification and valuation of merchandise, country of origin and marking determinations, quantitative import restraints, duty-preference and savings programs, understanding and receiving the benefits of free trade agreements, compliance audits, enforcement actions and other trade-related matters.

In order to assist clients with their compliance efforts and satisfy "reasonable care" requirements, Randy frequently performs reviews of companies' internal...

Luke Karamyali, Drinker Biddle Law Firm, Chicago, International Trade Law Attorney

Luke J. Karamyalil assists his clients in all aspects of international trade laws and regulations, including import and export compliance. He also assists clients in ensuring their internal processes meet Customs’ “reasonable care” standard. Luke has experience helping clients navigate specific trade laws and regulations, including those that arise under the Foreign Agents Registration Act, the Trade Adjustment Assistance Program, anti-boycott compliance, Foreign Ownership, Control, or Influence (FOCI) mitigation, and anti-dumping and countervailing duties.

Jared A. Angle Drinker Biddle Law Firm
International Trade Analyst

Jared A. Angle brings a wealth of experience in international trade policy and compliance issues, including antidumping/countervailing duty investigations, Department of Commerce verifications, and Section 201, 232 and 301 investigations. He provides deep analyses of trade matters for clients, leveraging his strong background in international affairs research and economics. Jared has worked with government agencies such as the U.S. International Trade Commission, Department of Commerce and U.S. Trade Representative, as well as major chemicals and...

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