AGENCY:

Enforcement and Compliance, International Trade Administration, Commerce.

ACTION:

Proposed rule and request for public comment.

SUMMARY:

The Department of Commerce (Commerce) is issuing, and requesting public comments on, a proposed rule to establish an Aluminum Import Monitoring And Analysis (AIM) system. Over the past decade, Commerce has operated the Steel Import Monitoring and Analysis (SIMA) system to monitor for import surges of specific steel products and to monitor for potential transshipment and circumvention of U.S. trade measures relating to these products. AIM, as proposed, will be similar to the existing SIMA system. Specifically, Commerce proposes to require import license applicants to identify the country where the aluminum used in the manufacture of the imported aluminum product was smelted and poured; to release this data on an aggregate basis, as appropriate; and to apply the licensing requirement to cover all imports of basic aluminum products, which are listed in Annex II.

DATES:

To be assured of consideration, written comments must be received on or before 5 p.m. EST on May 29, 2020.

ADDRESSES:

Submit comments through the Federal eRulemaking Portal at https://www.Regulations.gov, Docket ITA-2020-200408-0103. Comments may also be submitted by mail or hand delivery/courier, addressed to Jeffrey I. Kessler, Assistant Secretary for Enforcement and Compliance, Room 1870, Department of Commerce, 1401 Constitution Ave. NW Washington, DC 20230.

Commerce will consider all comments received before the close of the comment period. All comments responding to this notice will be a matter of public record and will generally be available on the Federal eRulemaking Portal at http://www.Regulations.gov. Commerce will not accept comments accompanied by a request that part or all the material be treated confidentially because of its business proprietary nature or for any other reason. Therefore, do not submit confidential business information or otherwise sensitive or protected information.

Any procedural questions should be addressed to E&C Communications Office at (202) 482-0063 or ECcomms@trade.gov.

FOR FURTHER INFORMATION CONTACT:

Julie Al-Saadawi at (202) 482-1930 or Brandon Custard at (202) 482-1823.

SUPPLEMENTARY INFORMATION:

Background

The SIMA System

AIM will operate in a similar manner as the SIMA system, which has operated under its current authority since March 11, 2005.

The purpose of the SIMA system is to provide steel producers, steel consumers, importers, and the general public with accurate and timely information on anticipated imports of certain steel products into the United States. Steel import licenses, issued through the online SIMA licensing system, are required by U.S. Customs and Border Protection (CBP) for filing entry summary documentation, or its electronic equivalent, for imports of certain steel mill products into the United States. Through the monitoring tool, certain import data collected from the licenses are aggregated weekly and reported on the publicly available SIMA system website, https://enforcement.trade.gov/​steel/​license/​. This tool provides valuable data regarding certain steel mill imports into the United States as early as possible and makes such data available to the public approximately five weeks in advance of official U.S. import statistics compiled by the U.S. Census Bureau (Census).

Section 232 Tariff on Imports of Aluminum Into the United States

On January 19, 2018, pursuant to section 232 of the Trade Expansion Act of 1962 (the Trade Expansion Act), as amended (19 U.S.C. 1862), the Secretary of Commerce (Secretary) transmitted to the President a report on his investigation into the effect of imports of aluminum articles on the national security of the United States.^[1] The Secretary found and advised the President that aluminum articles were being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States.^[2] In Presidential Proclamation 9704 of March 8, 2018 (Adjusting Imports of Aluminum Into the United States) (Proclamation 9704), the President concurred with the Secretary's findings and decided to adjust the imports of aluminum articles, as defined in clause 1 of Proclamation 9704, by imposing a 10 percent ad valorem tariff on such articles imported from most countries.^[3]

Subsequently, in Presidential Proclamation 9893 of May 19, 2019 (Adjusting Imports of Aluminum Into the United States) (Proclamation 9893), the President stated that the United States successfully concluded discussions with Canada and Mexico on satisfactory alternative means to address the threatened impairment of the national security posed by aluminum imports from Canada and Mexico.^[4] The United States agreed on a range of measures with Canada and Mexico to prevent the importation of aluminum that is unfairly subsidized or sold at dumped prices, to prevent the transshipment of aluminum, and to monitor for and avoid import surges.^[5] These measures are expected to allow imports of aluminum from Canada and Mexico to remain stable, at historical levels without meaningful increases, thus permitting the domestic capacity utilization to remain reasonably commensurate with the target level recommended in the Secretary's report.^[6] Additionally, the President noted these measures will provide effective, long-term alternative means to address the contribution of these countries' imports to the threatened impairment of the national security.^[7]

Furthermore, in Proclamation 9893, the President determined that, under the framework in the agreements, imports of aluminum from Canada and Mexico would no longer threaten to impair the national security, and thus the President decided to exclude Canada and Mexico from the tariff proclaimed in Proclamation 9704, as amended.^[8] Finally, the President noted that the United States will monitor the implementation and effectiveness of these measures in addressing our national security needs, and that the President may revisit this determination, as appropriate.^[9]

Explanation of Proposed Rule

Pursuant to his authority under section 301 of the Census Act, as amended (13 U.S.C. 301), the Secretary of Commerce proposes to establish a system of import licensing to facilitate the monitoring of imports of aluminum articles, including monitoring for import surges. The Secretary of Commerce has delegated the responsibility for issuing these regulations to the Assistant Secretary for Enforcement and Compliance. The International Trade Administration is thus proposing a rule, and requesting comments, to establish a web-based aluminum licensing and import monitoring system. AIM will operate in a similar way as the existing SIMA system and will be codified under 19 CFR 361. Minor changes have been proposed to regulations for the SIMA system which we propose to incorporate in AIM, if the modifications to the SIMA system are promulgated in a final rule.^[10]

The license application of AIM will be comprised of three parts:

(1) An online registration system for aluminum importers;

(2) An automatic aluminum license issuance system; and

(3) An import monitoring website.

Importers of basic aluminum products (listed in Annex II), which include all aluminum products currently subject to Section 232 tariff, will be required to obtain an aluminum import license for each shipment and must provide the license number to CBP as part of the submission of the entry summary, or its electronic equivalent. The only exceptions are the low-valued imports (i.e., aluminum imports valued under $5,000 per shipment described below) or informal entries as described below.

AIM will be based on automatically granted import licenses that will be required to import covered aluminum products (including all aluminum products currently subject to Section 232 duties). Because Commerce grants import licenses prior to the submission of an importation's customs entry summary data (up to 2 months before release of Census data), this approach ensures that the aluminum import monitor will function as an early warning system—yielding public data about 5-6 weeks prior to import statistics released by Census. Finally, the proposed aluminum import monitoring system would enable Commerce to gather and publish data on where aluminum was “smelted and poured,” in keeping with changes that have been proposed to regulations for the SIMA system. See 19 CFR part 360 to understand how the current SIMA system is currently operated. Because the SIMA system has worked well, Commerce proposes to have AIM be similar for imports on certain aluminum products. Parties are encouraged to comment on any part of the proposed regulations. Commerce proposes to codify the Aluminum Regulations in 19 CFR part 361.

Aluminum Import Licensing System

Similar to the steel licensing system, the aluminum import licensing system will include both an online registration system for importers and an automatic aluminum import license issuance system. In order to obtain an aluminum import license, an importer or the importer's agent or customs broker, must first register with Commerce and be assigned a username. This username will be required to log on to the aluminum import license issuance system. Although a primary username will be issued to an importing company or brokerage house, all operating units within the company (e.g., individual branches, divisions or employees) may have separate usernames associated with different email addresses that will be associated with the parent company. The aluminum import license issuance system will be designed to allow multiple users of a single identification number from different locations within the company to enter information simultaneously.

Any company or broker with a United States address may register and obtain a username. There is no fee to register and a username will be issued immediately if all registration fields are filled out. As part of the registration process, the importer, agent or customs broker will be required to provide certain general information. Such information will include the applicant company name, Employer Identification Number (EIN) or the CBP-issued importer number (where no EIN is available), address, phone number, contact information and email address for both the company headquarters and any branch offices that will be applying for aluminum licenses. This information will be used solely for the purposes of administering the aluminum import licensing and monitoring programs. The information will not be released by Commerce, except as required by U.S. law. Commerce will begin registering and issuing user login names at least two weeks prior to the implementation date of the aluminum licensing program. The username will be needed to apply for the license.

Aluminum import licenses will be issued to registered importers, customs brokers or their agents through an automatic aluminum import licensing system. The separately issued username discussed above will be required for company registration in the system. There will be no fee charged to apply for the import licenses.

Similar to steel imports, aluminum import licenses will be issued automatically after the completion of the application form. In order to obtain the license, the applicant must report the following information about the aluminum import transaction:

i. Filer company name and address;

ii. Filer contact name, phone number, fax number and email address;

iii. Entry type (i.e., Consumption, Foreign Trade Zone);

iv. Importer name;

v. Exporter name;

vi. Manufacturer name (filer may state “unknown”);

vii. Country of origin;

viii. Country of exportation;

ix. Expected date of export;

x. Expected date of import;

xi. Expected port of entry;

xii. Current HTS number (from Chapters 76);

xiii. Country where aluminum was smelted and poured;

xiv. Quantity (in kilograms) and

xv. Customs value (U.S. $).

Fields #1 and #2 above (e.g., applicant company name and address and the applicant's contact information) will be generated automatically in the license form from the company registration information. Other information will be available from drop down lists in the application form (e.g., Aluminum HTS numbers, country of origin/smelt, port of entry) and will not have to be typed. A sample copy of the proposed aluminum import license will be available for viewing on Enforcement and Compliance's website (https://trade.gov/​aluminum/​).

Upon completion of the application form, the importer, customs broker or the importer's agent will certify the form as to the accuracy and completeness of the information and submit the form electronically. After refreshing the page, the system will automatically issue an aluminum import license number. The refreshed form containing the submitted information and the newly issued license number will appear on the screen (the “license form”). Applicants can print the license form themselves. If needed, copies of completed license forms can be retrieved by the user or requested from Commerce during normal business hours.

The aluminum import license will be required on every entry of covered aluminum product (except informal entries covered below). Like SIMA, a single license can cover multiple products as long as the information at the top of the form (i.e., importer, exporter, manufacturer, and country of origin and exportation, and the expected dates of exportation and expected date of importation) are the same for the shipment. However, separate licenses will be required if any of the information above differs with respect to a given set of covered imported aluminum products. As a result, a single CBP entry may require more than one aluminum import license. The applicable license number(s) must cover the total quantity of aluminum entered and should match the information provided on the CBP entry summary. There is no requirement to present physical copies of the license forms at the time of entry summary; however, copies must be maintained in accordance with CBP's normal requirements. Licenses will be issued for single use and will be specific to a shipment.

Certain aggregate information collected from the license application system will be posted on the aluminum import surge monitoring website. Subject to comments received, only the aggregate information described below will be available to the public. All other information including copies of the licenses and the names of importers, exporters, and manufacturers, will be considered business proprietary information and will not be released to the public.

Aluminum Import Monitoring System

Commerce will create a standalone aluminum import monitoring website. This website will report certain aggregate information on aluminum imports categories obtained from the aluminum licenses. Aggregate information will be reported on a monthly basis by country of origin, country of smelt and pour, and aluminum product category and will include import quantity (metric tons), import Customs value (U.S. dollars) and average unit value (dollars per metric ton). However, Commerce will not report information if it would reveal business proprietary information. Reported monthly import data will be refreshed each week with new data on licenses issued in the prior week. This data collected may be adjusted periodically for corrected, canceled or unused aluminum import licenses, if deemed appropriate for accurate monitoring purposes. Information provided in the public import monitor will mirror that available for steel.

The monitoring system will also present a range of historical data for comparison purposes. This will include comparisons to the previous month and to the same month in the previous year; three month rolling averages along with similar comparisons to the immediately preceding period, the same period from the preceding year; and monthly import data on each aluminum product category. The public import monitoring system for aluminum articles will be similar to the monitoring system for SIMA. Commerce welcomes comments regarding the format of the monitoring system for AIM, and will incorporate any changes that are feasible.

Duration of the Aluminum Import License

The aluminum import license can be applied for up to 60 days prior to the expected date of importation and until the date of filing of the entry summary documents, or its electronic equivalent. The aluminum import license is valid for up to 75 days; however, import licenses that were valid on the date of importation but expired prior to the filing of entry summary data will be accepted. Special timing issues surrounding withdrawal of products from a warehouse, foreign trade zone issues, and temporary imports will be handled separately, as explained below.

Handling of Aluminum to Foreign Trade Zones (FTZs)

Commerce proposes to require a license for aluminum shipped into a U.S. FTZ. Because a CBP entry number would not be available for shipments entering the FTZ, the license required for entry into the zone will not require the CBP entry number. As with steel, a separate license will not be required upon withdrawal from the FTZ.

Informal Entries and Low-Value Aluminum Entries

No import license shall be required on informal entries of aluminum products, such as merchandise valued at less than $2,500. For additional information about informal entries, refer to 19 CFR 360.101(d) of the proposed regulatory text. For shipments containing less than $5,000 worth of aluminum, applicants can apply for a reusable Low-Value License; refer to 19 CFR 360.103(f) of the proposed regulatory text.

Interim Monitoring

The aluminum import monitor will provide information on U.S. imports of aluminum from all countries by broad product types in both value and volume measures. Once the license collection begins, additional data will be added to the aluminum monitor. The aluminum import monitor will be similar to the monitor available for steel imports. However, it will not encompass the preliminary Census data, which is incorporated into the steel monitor. Over the last 10 years, there have been advancements to Census's regular data release schedule for its public monthly trade statistics. Commerce believes that the early release preliminary data from Census is not critical to the early warning monitor because the aluminum import license data will be available. However, the Department intends to keep using preliminary Census data for purposes of steel monitoring.

Classifications

Executive Order 12866

The Office of Management and Budget (OMB) has determined that this proposed rule is significant for purposes of Executive Order 12866.

Executive Order 13771

This proposed rule is not expected to be subject to the requirements of Executive Order 13771 because this proposed rule is expected to result in no more than de minimis costs.

Paperwork Reduction Act

This proposed rule contains the collection of information subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35 (PRA). Similar requirements have been approved for steel by OMB (OMB No.: 0625-0245; Expiration Date: 01/31/2021). Based on Commerce's experience with similar burdens for steel and sample data for aluminum entries, Commerce estimates that public reporting for this collection of information will be less than 10 minutes per response, including the time for reviewing instructions, and completing and reviewing the collection of information. Commerce also estimates that the average registered user will complete 173 licenses per year.

Paperwork Reduction Act Data:

OMB Number: 0625-.

ITA Number:

Type of Review: Regular Submission.

Affected Public: Business or other for-profit.

Estimated Number of Registered Users: 1,750.

Estimated Time per Response: less than 10 minutes.

Estimated Total Annual Burden Hours: 46,428 hours.

Estimated Total Annual Costs: $0.00.

Notwithstanding any other provision of law, no person is required to respond to nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB Control Number.

Request for Comments: Comments are invited on (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and costs) of the proposed collection information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or forms of information technology.

All comments on the information collection will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record. Send comments regarding the burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, as directed under ADDRESSES and DATES as well as to OIRA at OIRA_Submission@omb.eop.gov, or fax to 202-395-7285.

Executive Order 13132

This proposed rule does not contain policies with federalism implications as that term is defined in section 1(a) of Executive Order 13132, dated August 4, 1999 (64 FR 43255 (August 10, 1999)).

Regulatory Flexibility Act

The Chief Counsel for Regulation has certified to the Chief Counsel for Advocacy of the Small Business Administration under the provisions of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that the proposed rule if adopted, would not have a significant economic impact on a substantial number of small entities as that term is defined in the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA). A summary of the factual basis for this certification is below.

This proposed rule will not have a significant economic impact on a substantial number of companies. This rule, if implemented, would: (1) Require import license applicants to specify certain information including the country where aluminum used in the manufacture of the imported aluminum product was smelted and poured; and (2) cover the following HTS codes: 7601, 7604, 7605, 7606, 7607, 7608, 7609, 7616.99.51.60, and 7616.99.51.70. The entities that would be impacted by this rule are importers and brokerage companies that import aluminum products. Based on statistics derived from current license applications for steel, of the approximately 557,143 licenses issued each year, Commerce estimates that less than two percent of the license applications would be filed by importers and brokerage companies considered to be small entities. AIM would cover about half of the number of SIMA's licenses based on statistics for one month's entry information.

Based on the current usage of the SIMA system, Commerce does not anticipate that this proposed rule will have a significant economic impact. AIM would be similar to the SIMA system. In most cases, brokerage companies will apply for the license on behalf of the aluminum importers. Many of the same brokerage firms that handle steel imports will likely handle aluminum imports. Most brokerage companies that are currently involved in filing documentation for importing goods into the United States are accustomed to CBP's automated entry filing systems. Today, CBP's filings are handled electronically. Therefore, the proposed license application should not be a significant obstacle to any firm. Should an importer or brokerage company need to register for an account or apply for a license non-electronically, a fax/phone option is available at Commerce during regular business hours. There will be no cost to register for a company-specific aluminum license account and no cost to file for the license. Each license form is expected to take less than 10 minutes to complete and collects much of the same information required for CBP entry summary. The import license is the only additional U.S. entry requirement that the importers or their representatives must fulfill in order to import each covered product shipment.

Commerce does not charge fees for licenses. Similar to the estimates used for the steel license program, Commerce estimates that the likely aggregate license costs incurred by small entities in terms of the time to apply for licenses as a result of this proposed rule would be less than two percent, or an estimated $18,571, of the estimated total $928,560 cost to all aluminum importers to process the on-line automatic licenses. These calculations are based on an hourly pay rate of $20.00 multiplied by the estimated 46,428 total annual burden hours. The vast majority of licenses are for large companies. The average cost of a single license is less than $4.17 based on the estimate that one license requires less than 10 minutes of the filer's time.

This proposed rule contains collection-of-information requirements subject to review and approval by OMB under the PRA.

Public reporting for this collection of information is estimated to be less than 10 minutes per response, including the time for reviewing instructions, and completing and reviewing the collection of information.

Therefore, the proposed rule would not have a significant economic impact on a substantial number of small business entities. For this reason, an Initial Regulatory Flexibility Analysis is not required and one has not been prepared.

List of Subjects in 19 CFR Part 361

• Administrative Practice and Procedure
• Business and Industry
• Imports
• Reporting and Recordkeeping Requirements
• Aluminum

For the reasons stated in the preamble, the Department of Commerce proposes to add 19 CFR part 361 as follows:

19 CFR PART 361—ALUMINUM IMPORT MONITORING AND ANALYSIS SYSTEM

Footnotes