[Federal Register Volume 88, Number 165 (Monday, August 28, 2023)]
[Proposed Rules]
[Pages 58525-58538]
[FR Doc No: 2023-18328]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 705

[Docket No.<PHONE_NUMBER>]
RIN 0694-AJ27

Revisions of the Section 232 Steel and Aluminum Tariff Exclusions
Process

AGENCY: Bureau of Industry and Security, U.S. Department of Commerce.

ACTION: Proposed rule.

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SUMMARY: This proposed rule revises aspects of the process for
requesting exclusions from the duties and quantitative limitations on
imports of aluminum and steel discussed in five previous Bureau of
Industry and Security (``BIS'') interim final rules implementing the
exclusion process authorized by the President under section 232 of the
Trade Expansion Act of 1962, as amended (``Section 232''). The changes
in this proposed rule are also informed by a notice of request for
public comments on the Section 232 exclusions process that was
published by BIS on February 10, 2022 (February Notice). The February
Notice was directed by Proclamation 10328 of December 27, 2021, that
directed BIS to review the Section 232 exclusions process to make
improvements, including soliciting public comments as part of the
review process. Based on a BIS review of the existing Section 232
exclusion process for areas of improvement and public comments on the
current process for submissions to BIS, BIS is publishing this proposed
rule to propose revisions to the Section 232 exclusions process,
including to the Section 232 Exclusions Portal. As part of this
proposed rule, BIS requests public comments on the proposed changes.

DATES: Comments on this proposed rule must be received by BIS no later
than October 12, 2023.

ADDRESSES: See SUPPLEMENTARY INFORMATION section for information on
submitting exclusion requests, objections thereto, rebuttals, and
surrebuttals.
    You may submit comments, identified by docket number BIS-2023-0021
or RIN 0694-AJ27, through the Federal eRulemaking website: http://www.regulations.gov. No other submission methods are being used for
submitting comments on this proposed rule. Follow the instructions for
submitting comments.
    All filers using the portal should use the name of the person or
entity submitting comments as the name of their files, in accordance
with the instructions below. Anyone submitting business confidential
information should clearly identify the business confidential portion
at the time of submission, file a statement justifying nondisclosure
and referring to the specific legal authority claimed, and provide a
non-confidential version of the submission.
    For comments submitted electronically containing business
confidential information, the file name of the business confidential
version should begin with the characters ``BC.'' Any page containing
business confidential information must be clearly marked ``BUSINESS
CONFIDENTIAL'' on the top of that page. The corresponding non-
confidential version of those comments must be clearly marked
``PUBLIC.'' The file name of the non-confidential version should begin
with the character ``P.'' The ``BC'' and ``P'' should be followed by
the name of the person or entity submitting the comments or rebuttal
comments. Any submissions with file names that do not begin with a
``BC'' or ``P'' will be assumed to be public and will be made publicly
available through http://www.regulations.gov. Commenters submitting
business confidential information are encouraged to scan a hard copy of
the non-confidential version to create an image of the file, rather
than submitting a digital copy with redactions applied, to avoid
inadvertent redaction errors which could enable the public to read
business confidential information.

FOR FURTHER INFORMATION CONTACT: For questions regarding this proposed
rule, contact Erika Maynard at<PHONE_NUMBER> or via email
[email protected], or email [email protected] regarding
provisions in this proposed rule specific to steel exclusion requests
and [email protected] regarding provisions in this proposed rule
specific to aluminum exclusion requests.

SUPPLEMENTARY INFORMATION:

Background

    On March 8, 2018, Presidential Proclamations 9704, Adjusting
Imports of Aluminum Into the United States (83 FR 13267), and 9705,
Adjusting Imports of Steel Into the United States (83 FR 11625),
imposed duties on imports of aluminum and steel. The Proclamations also
authorized the Secretary of Commerce to grant exclusions from the
duties if the Secretary determines the steel or aluminum article for
which the exclusion is requested is not ``produced in the United States
in a sufficient and reasonably available amount or of a satisfactory
quality'' or should be excluded ``based upon specific national security
considerations,'' and provided authority for the Secretary to issue
procedures for exclusion requests. On April 30, 2018, Proclamations
9739 and 9740, and on May 31, 2018, Proclamations 9758 and 9759, set
quantitative limitations on the import of steel and aluminum from
certain countries in lieu of the duties. On August 29, 2018,
Proclamations 9776 and 9777 also authorized the Secretary to grant
exclusions from quantitative limitations based on the same standards
applicable to exclusions from the tariffs.

The Section 232 Exclusions Process

    Since March 19, 2018, BIS has published five interim final rules
(IFRs) that established and made various revisions to the Section 232
exclusions process, as well as a Notice of Inquiry seeking public
comment on certain aspects of the Section 232 exclusions process.
    On March 19, 2018, BIS issued an IFR, Requirements for Submissions
Requesting Exclusions from the Remedies Instituted in Presidential

Proclamations Adjusting Imports of Steel into the United States and
Adjusting Imports of Aluminum into the United States; and the Filing of
Objections to Submitted Exclusion Requests for Steel and Aluminum (83
FR 12106), establishing the Section 232 exclusions process in
supplements no. 1 and 2 to 15 CFR part 705.
    On September 11, 2018, BIS issued a second IFR, Submissions of
Exclusion Requests and Objections to Submitted Requests for Steel and
Aluminum (83 FR 46026), which revised the exclusions process to
increase transparency, fairness, and efficiency.
    On June 10, 2019, BIS issued a third IFR, Implementation of New
Commerce Section 232 Exclusions Portal (84 FR 26751), that revised the
two supplements to part 705 to grant the public the ability to submit
new exclusion requests through the Section 232 Exclusions Portal while
still allowing the opportunity for public comment on the portal.
    On May 26, 2020, BIS issued a notice of inquiry with request for
comment, Notice of Inquiry Regarding the Exclusions Process for Section
232 Steel and Aluminum Import Tariffs and Quotas (85 FR 31441), that
sought public comment on the appropriateness of the information
requested and considered in applying the exclusion criteria and the
efficiency and transparency of the process employed.
    On December 14, 2020, BIS issued a fourth IFR, Section 232 Steel
and Aluminum Tariff Exclusions Process (85 FR 81060), which established
General Approved Exclusions (GAEs) to reduce the number of exclusion
requests for products consistently found not to be produced in the
United States, reducing the submission burden on both industry and the
Section 232 exclusions process. The December 14 IFR identified 123 GAEs
that had generally never received an objection or very few objections
via the Section 232 exclusions process. GAEs are available to all
would-be requesters for steel and aluminum products imported under 10-
Digit Harmonized Tariff Schedule of the United States (HTSUS)
classifications without quantity limit or expiration date.
    On December 9, 2021, BIS subsequently suspended 30 GAEs in its
fifth IFR, Removal of Certain General Approved Exclusions Under the
Section 232 Steel and Aluminum Tariff Exclusion Process (86 FR 70003),
on the Section 232 Exclusions process because they were determined by
BIS to no longer fit the criteria of a GAE.
    On January 3, 2022, Presidential Proclamations 10327 (87 FR 1) and
10328 (87 FR 11) were published. These Proclamations implemented an
understanding reached between the United States and the European Union
including the establishment of tariff rate quotas for steel and
aluminum articles imported from the European Union member countries.
Proclamation 10328 also directed the Secretary of Commerce to seek
public comment on the Section 232 exclusions process, including the
responsiveness of the exclusions process to market demand and enhanced
consultation with U.S. firms and labor organizations.
    On February 10, 2022, BIS published Request for Public Comments on
the Section 232 Exclusions Process (87 FR 7777) (February 2022 Notice),
as directed by Presidential Proclamation 10328. The notice sought
public comment on a variety of topics regarding the responsiveness of
the exclusions process to market demand and enhanced consultation with
U.S. firms and labor organizations. The notice comment period closed in
March 2022, having received nearly 100 comments. Information about the
comments received, along with BIS's responses, are detailed below.

Why is BIS publishing this proposed rule?

    BIS is publishing this proposed rule to seek public comment on
changes the Department believes will further improve the Section 232
exclusions process, following the receipt of comments from the February
2022 notice and then making any refinements in the changes proposed in
this proposed rule in response to the comments received. BIS believes
these changes will make important improvements and is requesting public
comments to further evaluate how effective these changes will be in
improving the Section 232 exclusions process. This action is consistent
with the Department's approach of continually working to improve the
process and obtain public feedback.
    This proposed rule serves two functions. First, it seeks comments,
as required by Proclamation 10328. Second, it responds to the
outstanding comments received in the broader Section 232 exclusions
process IFRs detailed above. As a matter of rulemaking, an IFR is
generally followed by a final rule. Therefore, this proposed rule
finalizes the Section 232 exclusions process IFRs. Any further action
to modify the Section 232 exclusions process will be taken through
issuance of a final rule.

What are the key changes included in this proposed rule?

    This proposed rule makes the following four changes to the Section
232 exclusions process:
    First, it creates a more efficient GAE process. BIS is committed to
maintaining GAEs as a policy matter and is using this proposed rule to
further clarify the general process by which GAEs are identified. As
noted above, BIS issued an initial list of GAEs in December 2020 and
modified the list of GAEs in December 2021. Originally, GAEs had been
noted by commenters who submit exclusion requests, and by trade
associations that represent those companies, as one of the most
important changes that could be made to improve the efficiency of the
Section 232 exclusions process. Their creation was estimated to result
in an immediate decrease of 5,000 exclusion requests annually,
resulting in a significant improvement in efficiency, with the
possibility of more in the future. GAEs were identified at the ten-
digit statistical reporting number of the HTSUS that had generally
received no objections.
    BIS proposes changing the criteria that has generally been used for
GAEs from the HTSUS statistical reporting number that have received no
objections to HTSUS classification codes (or subproducts) with very low
rates of successful objections. The current criteria have focused most
heavily on whether an HTSUS code has received objections. One of the
problems with this past approach is that any party opposed to certain
GAEs could submit objections regardless of the merits of those
objections, which would make those HTSUS categories ineligible for GAE
status. This undermines the effectiveness of the Section 232 exclusions
process, creates unnecessary burdens on BIS and industry, and reduces
the fairness and efficiency of the process. BIS still believes that the
number of objections received is generally the right criterion to use;
however, that criterion needs to be updated to focus on the number of
substantiated objections, which is a better metric to use and should
deter objections only submitted to prevent specific GAEs. BIS believes
that the low rates of successful objections for specific 10-digit HTSUS
classification codes shows that U.S. industry does not produce the
products or subproducts in question in a sufficient and reasonably
available amount or of a satisfactory quality. New GAEs will continue
to be identified following a thorough analysis of objections. As
described below, BIS proposes these actions to ensure the

process for identifying future GAEs is efficient and fair. BIS
estimates that this change could result in up to a twenty percent
reduction in the total number of exclusion requests submitted in the
232 Exclusions Portal, depending on the ultimate objection rate
threshold and application used by the Department.
    Second, and relatedly, this proposed rule addresses the need to
create a more efficient Section 232 exclusions process by introducing a
General Denied Exclusions (GDE) process. GDEs have been requested by
commenters, who submit objection requests, as an important change that
could be made to improve the efficiency of the Section 232 exclusions
process and provide a balance to the GAE process. While it is difficult
to estimate the expected annual reduction in exclusion requests, BIS
anticipates an improvement in efficiency as well as increasing fairness
in the process by providing a process comparable to the GAE process.
Like BIS's proposed GAE evaluation, GDEs will generally be implemented
if, among other things, the HTSUS classification code (or subproducts)
have very high rates of successful, substantiated objections. BIS has
added various requirements, such as certifications, over the years to
limit voluminous exclusion requests that may exceed potential
objectors' ability to fairly assess the requests and their ability to
satisfy the requests, which has helped improve the efficiency of the
Section 232 exclusions process. The addition of the GDEs will further
enhance the efficiency of the Section 232 exclusions process by
reducing the burden on objectors and requesters with respect to Section
232 exclusion requests that historically have had a very low likelihood
of being approved. As with GAEs, GDEs would be applied in a manner that
would increase efficiency and have little impact on which products are
ultimately subject to or excepted from the tariffs. New GDEs would be
identified following an analysis of substantiated objections and
exclusion requests that have generally been consistently denied. As
described below, BIS introduces GDEs in this proposed rule.
    Third, BIS is using this proposed rule as an opportunity to modify
the existing certification language and introduce new certification
requirements for exclusion requests. Volume certifications were
introduced onto the Exclusion Request Form in December 2020 in the
Section 232 Exclusions Portal. Volume certification requirements were
established after data reviewed by BIS indicated that some exclusion
requesters were submitting exclusion requests for high volumes of
product not ultimately imported. Continual processing of high volumes
of exclusions not utilized decreases the efficiency of the Section 232
exclusions process and reduces the accuracy of data used by BIS to
generate informed policy decisions on the Section 232 national security
measures. The certification process further ensures that the requested
volume in exclusion requests is consistent with the past and future use
of steel or aluminum by an exclusion requester. Currently, requesters
certify that their business ``expects to consume, sell, or otherwise
use the total volume of product . . . within the next calendar year''
across their requests, which is subject to a verification by BIS.
    BIS proposes modifications to the existing certification on the
Exclusion Request Form. With the proposed changes, before filing an
exclusion request, requesters would also need to certify that they have
first made reasonable efforts to source their product from the United
States and then, if unsuccessful in sourcing from the United States,
that they have made reasonable efforts to source their product from a
country with which the United States has arrived at a satisfactory
alternative means to address the threat to the national security under
Section 232. In addition to the certification, requesters would be
required to file, simultaneously with their request submission,
evidence of the certified sourcing attempts. These can be filed
publicly as an attachment to the request submission, or if the
information is claimed to be confidential then requesters can submit
information to an email address similar to the process by which
requesters currently submit confidential information linked to their
rebuttals. These sourcing attempts need to have been made within 12
months from the date of submission of the request. BIS is seeking
comments (see below) regarding what the evidence supporting sourcing
attempts should be and how it should be defined. The United States has
alternative arrangements with several other markets, including
Argentina, Australia, Brazil, Canada, the European Union, Japan,
Mexico, South Korea, and the United Kingdom. Therefore, requiring
certification for attempting to source from the United States or an
identified partnered country ensures that an attempt was made to first
procure from those partner countries. If the sourcing attempts evidence
is not provided simultaneously with the request submission, then the
request will be rejected. BIS is seeking comments (see below) regarding
the appropriate form and substance of evidence that must be provided by
requestors to support their certification of such sourcing attempts.
    Fourth, BIS is proposing similar certification language on the
objection form to further ensure objectors can supply comparable
quality and quantity steel or aluminum and make it ``immediately
available'' to requestors in line with the standards described in the
previous Section 232 IFRs referenced above. BIS welcomes comments from
the public on whether this standard is appropriate for the
certification or if a different time period should be specified. BIS is
also interested in comments on how to address differences between
different types of products, which may require longer periods, if a
commenter suggests a different time period be specified. With this
proposed change, objectors would certify their intent and ability to
provide the requested product to the requester if successful in their
objection. In addition to the certification, objectors would be
required to file, simultaneously with their objection submission,
evidence that it has commercially sold the same product as that which
is being requested within the last 12 months, or evidence that it has
engaged in sales discussions with this requesting company or another
company requesting the same product within the last 12 months. This
evidence can be filed publicly as an attachment to the objection
submission, or if the information is claimed to be confidential then
requesters can submit information to an email address similar to the
process by which objectors currently submit confidential information
linked to their surrebuttals. If the evidence described above is not
provided simultaneously with the objection submission, then the
objection will be rejected. BIS is seeking comments (see below)
regarding the appropriate form and substance of evidence that must be
provided by objectors to support their certification of such sales
discussions. This proposed change will reduce cases where objections to
an exclusion are made but the objector fails to follow through on
supplying the material.
    Each of the four proposed changes above would add additional
features to the Section 232 exclusions process to better ensure that
participants in the Section 232 exclusions process further focus their
requests and objections as well as make important changes to improve
the efficiency of the Section 232 exclusions process. The proposed
requirements to provide certain

evidence upon submission, as opposed to later upon request of BIS, will
enable BIS to conduct more timely and accurate certification reviews
and enhance fairness, transparency, and efficiency in the Section 232
exclusions process for all involved parties.

Public Comments and BIS Responses

    The public comment period on the February 2022 Notice closed in
March 2022. BIS received nearly 100 public comments on the notice of
inquiry, with one comment being deemed unresponsive. Several commenters
referenced the imposition of duties and quantitative limitations,
questioning the benefit of such regulations. Those comments are outside
the scope of the February 2022 Notice that solicited comments on the
Section 232 exclusions process. BIS has previously provided responses
on these types of comments in the Section 232 rules cited in this
proposed rule; therefore, BIS is generally not summarizing or providing
responses to those general comments on the duties and quantitative
limitations in this proposed rule. Some subject matter in the comments
below may overlap generally with comments received in response to
previous BIS Section 232 exclusions process publications that solicited
public comments and that garnered BIS response or were still being
considered under the last administration. However, they were overtaken
by the larger review of the Section 232 exclusions process that is
being undertaken by the current administration and the February 2022
Notice that provided a new opportunity for the public to identify what
remaining issues needed to be improved under the Section 232 exclusions
process.
    The comments BIS received in response to the February 2022 Notice
cover the same topics as the comments from previous Section 232
exclusion process publications. So, this proposed rule is responsive to
all those comments. The comments described in this proposed rule are
either different enough from comments previously responded to in past
Section 232 exclusions process publications to warrant response or that
they warrant additional comment due to an ever-changing industrial
landscape and the continuing effort to ensure that administration of
the Section 232 exclusions process remains fair, efficient, and
transparent.
    Based on the comments received in response to February 2022 Notice,
BIS is proposing additional steps to increase the fairness, efficiency,
and transparency of the Section 232 exclusions process. BIS has
combined comments with similar subject matter such that the BIS
response to those comments in this proposed rule is more efficient. As
part of this proposed rule, BIS welcomes comments from the public,
particularly those that participate in the Section 232 exclusions
process, on whether the changes included in this proposed rule achieve
the stated objectives; at the same time, BIS also welcomes any other
comments or suggestions from the public regarding the fairness,
efficiency, and transparency of the Section 232 exclusions process.

Transparency

General Concerns

    Comment (a)(1): Several commentors suggested that BIS should
require public summaries of confidential business information (CBI) in
exclusions requests and objections. This would be similar to the
existing requirements for rebuttals and surrebuttals.
    BIS response: BIS agrees that this improves transparency in the
request and objection stages. In fact, the system already requires that
parties submit public summaries of CBI for rebuttals and surrebuttal.
Expanding this requirement to requests and objections is in line with
the existing requirements for rebuttals and surrebuttals. Submissions
of such information should be in sufficient detail to permit a
reasonable understanding of the substance of the information to allow
rebuttal. A party's failure to timely and properly provide and
summarize its CBI detracts from transparency and fairness and can
result in BIS not considering a party's CBI. The regulations regarding
CBI for the Section 232 exclusions process and the submission of CBI
are found in paragraph (b)(5)(iii) of supplement no. 1 to part 705.
    Comment (a)(2): Commenters provided input on requiring public
disclosure of delivery times on the exclusion request and objection
forms. One commentor suggested that they should be required.
    BIS response: This is already explicitly required under paragraphs
(c)(6) Criteria used to review exclusion requests and (d)(4) Substance
of objections to submitted exclusion requests in supplement no. 1 to
part 705. Paragraphs (c)(6) and (d)(4) note that it is incumbent upon
both the exclusion requester and objecting producers to provide
evidence supporting their claimed delivery times, from the receipt of a
binding purchase order to ultimate delivery of the material to the
domestic facility of the requester. BIS is further proposing language,
including additional text to paragraph (d)(4), to clarify that all
delivery and production times requested in the objection form are not
considered CBI and must be included in the objection form for any
product that is the subject of the request and objection. Objections
that do not appropriately include delivery times where requested in the
public version will be rejected by BIS.
    Comment (a)(3): Multiple commenters suggested that delivery time
should require certification.
    BIS response: BIS agrees with this suggestion. The current system
already requires certification that information provided within an
objection is factual and supported by documentation as needed, as
referenced above in response to comment (a)(2). BIS also notes that
everything reported by all party involved in the Section 232 exclusions
process is certified as true under penalty of perjury.
    Comment (a)(4): One commentor suggested that BIS should consider
the logistical challenges and other supply chain issues facing imports
in evaluating delivery times; and that BIS should seek clarification
from relevant parties when necessary to ensure an accurate
determination when comparing to domestic delivery timetables.
    BIS response: BIS disagrees with this suggestion because market
conditions are constantly changing; using relative measures for
delivery time would prevent BIS from fairly applying the same standard
across all parties to the Section 232 exclusions process. BIS also
stresses that seeking clarification with relevant parties would by
necessity occur through private communications; however, it is critical
that all relevant information, including accurate delivery timeframes,
be provided in the public record for all parties to have an opportunity
to comment on or contest such claims. Requesters with unique delivery
challenges have repeated opportunities throughout the process to
provide additional information in the public record and/or could submit
a new exclusion request if facts of the case change.
    Comment (a)(5): One commentor suggested that BIS should verify with
objectors that the products are available on a ``turnkey'' basis in a
commercially reasonable time and noted that this process may include
calling consumers or asking the objector directly about how quickly
they can fulfill a request.
    BIS response: BIS does not agree with this suggestion. This
information is provided in the record. While this information is
subject to change, BIS

evaluates the provided information based on conditions at the time of
submission. BIS also notes that the rebuttal process, as well as the
surrebuttal process are intended to allow the parties involved, to
provide updated information as the parties respond to each other in the
Section 232 exclusions process.
    Comment (a)(6): Similarly, one commentor stated that objectors who
are already operating at full capacity should not be allowed to object.
    BIS response: BIS does not agree with this suggestion because
market conditions can and do change. For example, an objector may be in
the process of adding capacity, so BIS does not want to impose a
restriction that would prohibit such producers from being able to
submit objections. The expansion of domestic industrial capacity for
aluminum and steel is key to achieve the national security objectives
of the tariffs and the Section 232 exclusions process, so adopting this
type of a restriction would run counter to that objective.

Certification for Objectors and Requesters

    Comment (b)(1): Several commentors suggested that objectors and
requesters should both be required to submit ``substantive evidence
regarding these claims [the assertions they make in Section 232
submissions].''
    BIS response: BIS agrees that claims made by objectors and
requesters must be adequately supported. BIS is introducing additional
certification requirements on objection forms as well as evidence
requirements for objection submissions. These certifications and
additional evidentiary requirements are designed to address concerns of
objectors filing objections when they cannot or will not provide the
requested product. Under the proposed certification of objection
submitted requirement pursuant to paragraph (d)(5) in supplement no. 1
to part 705, the objector must certify that they currently manufacture
the requested product at a facility in the United States. They must
also certify that in response to a written request by the requester
during the next year they will offer to sell and timely deliver to the
requester the full quantity of the product at then-existing market
rates and terms and in accordance with the other terms specified in the
objection that they are submitting. Ensuring that all parties involved
in the process substantiate their claims facilitates achieving the
Section 232 exclusions process objectives. As for the requesters,
imports from countries with which the United States has an alternative
means to address the national security threat already make up roughly
70% of steel and aluminum imports. Therefore, adding this certification
statement not only better balances requirements for requesters and
objectors, but will not significantly increase the regulatory burden on
requesters.
    Comment (b)(2): At least one commenter requested BIS institute the
same additional certification requirements for rebuttals, as is done
for exclusion requests.
    BIS response: BIS does not agree that this is necessary. In
addition to the unique certification requirements for requesters and
objectors, parties must certify under the threat of criminal
prosecution that all information contained in all their submissions are
complete and correct to the best of their knowledge. As a result, any
statement made in a rebuttal or surrebuttal needs to be consistent with
the certifications already made by the organization in the exclusion
request or objection--meaning that including any additional unique
certification requirements in the rebuttal or surrebuttal forms is not
necessary.

Exclusion Requests

Timeline for Requests

    Comment (c)(1): BIS received a comment suggesting that exclusions
for new requests continue to be for up to one year, but up to two years
if it is an existing request that has previously been granted, due to
the current global supply chain issues.
    BIS response: BIS is considering this as market conditions are
constantly changing. This change would not require a regulatory change.
Under the existing paragraph (h)(2)(iv) to supplement no. 1 to part
705, BIS already specifies that exclusions will generally be approved
for one year from the date of the signature on the decision memo, but
may be valid for shorter or longer than one year depending on the
specifics of the exclusion request. So, exclusion requesters already
can request longer periods for exclusion requests and BIS already has
the regulatory authority to approve longer exclusion requests when
warranted. However, the circumstances under which BIS would approve a
longer exclusion request must be unique to require such an action.
Currently, the conditions are not unique such that they require a
longer exclusion request. Also, exclusion requesters should also be
aware that approving multiyear exclusion requests could run counter to
the objectives of trying to encourage increased capacity utilization in
the United States. BIS would also take that into account when
considering a longer period for an exclusion request than one year.
    Comment (c)(2): BIS received a comment suggesting that one way to
reduce the burden on all parties involved in the process would be to
implement a limited period each year where exclusions can be requested
for the following calendar year.
    BIS response: BIS is not making those changes at this time, given
the dynamic nature of the markets at this time. In addition, BIS
questions whether compressing all reviews into a short time period
would improve the overall efficiency and burdens associated with
administering the Section 232 exclusions process.
    Comment (c)(3): A commenter suggested that BIS should collaborate
with Customs and Border Protection (CBP) to implement a system to
automatically register granted exclusions with CBP to help streamline
the Section 232 exclusion process and reduce unnecessary administrative
work for both agencies.
    BIS response: BIS already works closely with CBP to quickly report
granted exclusions on a weekly basis and ensure they are programmed
accurately into the Automated Commercial Environment (ACE). BIS and CBP
continue to make improvements in this area within their existing
program constraints and are currently considering further potential
programmatic enhancements to the data transfers between BIS and CBP.
CBP recently revised and streamlined its procedures for activating
granted exclusions and parties should continue to confer directly with
CBP about the procedures for utilizing a granted exclusion.

Information Provided in Requests

    Comment (d)(1): A commentor suggested that information collected in
the exclusion process does not allow for requesters to provide
information related to objections on their products in previous
requests. If it did, the commenter notes, requesters would be able to
address those objections before they occur again and BIS would have
that information at the outset, allowing faster decisions.
    BIS response: BIS disagrees with this comment. BIS already
encourages requesters to submit this type of information in their
exclusion requests or the related supplements. BIS also encourages
requestors to submit this type of information as relevant when filing
rebuttals to objections received against their exclusion requests.

However, BIS maintains that all requests are reviewed solely based on
the information provided in each individual record of exclusion
requests, objections, rebuttals, and surrebuttals, as well as any
associated public or CBI attachments.
    Comment (d)(2): One commenter suggested that BIS should eliminate
redundant or superfluous parts in the forms.
    BIS response: BIS generally agrees with this, however, has concerns
with this suggestion in practice. Obtaining the necessary physical,
mechanical and chemical characteristics on the requested products
ensures that an accurate description of the products is provided that
is subject to a request. However, BIS acknowledges that the ``full,
complete description of the product'' sought in the noted up-front
section of the questionnaire, if properly provided, provides the
necessary characteristics of the product. The additional specific
characteristics provide further clarification on the products but may
not further the ability of parties to review the material subject to
the request or provide further insight into the government's ability to
implement decisions on products subject to the requests. Also, some
fields, such as names of ports of entry and number of shipments may be
possibly reexamined. So, BIS will seek public comment on this matter.
See the Request for Public Comments section for specific information
sought.

Other General Requester Comments

    Comment (e)(1): A commenter suggested that before considering any
new product exclusion request, BIS should require: (1) evidence that
the requested product cannot be sourced either from U.S. producers or
from any of the countries with an alternative arrangement to the
tariffs; (2) detailed documentation that the exclusion can only be
obtained from a country subject to the tariffs; and (3) that a good
faith effort was conducted to check availability from both domestic
producers and from all countries not subject to the tariffs. Absent
this showing, Commerce should decline to process and post the exclusion
request.
    BIS response: BIS agrees with this suggested change and has added
new certification and evidentiary requirements on exclusion requesters
in this proposed rule. Requesters must now before filing an exclusion
request, certify that they have first made reasonable efforts to source
their product from the United States and then, if unsuccessful in
sourcing from the United States, that they have made reasonable efforts
to source their product from a country with which the United States has
arrived at a satisfactory alternative means to address the threat to
the national security under Section 232, and provide evidence of those
sourcing attempts simultaneously with the request submission. The
process is intended to treat each party as fairly as possible given
complex global market conditions and specialized production unique to
individual countries.

General Approved Exclusions (GAEs) and General Denied Exclusions (GDEs)

    Comment (f)(1): Some commenters raised concerns about whether the
adoption of GAEs made the Section 232 exclusions process too much in
favor of exclusion requesters and whether similar changes should be
extended to objectors in the Section 232 exclusions process.
    BIS response: BIS is committed to ensuring that the Section 232
exclusions process is fair and efficient. That is why BIS established
the GAEs. BIS is proposing the concept of the GDEs for the same reason.
While no specific commenter suggested the adoption of GDEs, per se,
some commented on related topics regarding creating a concept, such as
the GDEs. The creation of the GDE process would ease the bureaucratic
burden in the Section 232 exclusions process for all parties and
improve the overall efficiency of the Section 232 exclusions process.
Additional General Approved (GAEs) and Denied (GDEs) Exclusions would
further streamline the existing Section 232 Exclusions Process.
    Comment (f)(2): Another commenter suggested that semi-finished
steel should be removed from the list of products eligible for an
exclusion.
    BIS response: BIS will consider this further; it is possible that
this product could be a GDE. To reduce public burden and increase
efficiency, and thus be considered as a possible GDE, it would need to
fit the criteria established by BIS for GDEs. However, BIS is not
proposing the establishment of specific GDEs with this proposed rule.
    Comment (f)(3): Several commenters suggested specific items that
should be used as a GAE.
    BIS response: All GAEs are determined based on an internal analysis
of data regarding the items and selection criterion to achieve the
intended policy objectives.
    Comment (f)(4): One commenter suggested that when a GAE is
activated or deactivated, there should be notification period before
change is implemented to allow exclusion requesters and objectors to
adapt to the change.
    BIS response: BIS agrees with this suggestion. BIS intends to adopt
fifteen-day delayed effective date before implementing such changes to
give the public an opportunity to adjust as needed. BIS welcomes
further comments on whether more time is required as a notification
period before implementing changes to GAEs.
    Comment (f)(5): A commenter suggested that BIS allow for objections
to GAEs.
    BIS response: BIS does not agree with this suggestion. The public
is already permitted to provide specific information regarding the
inclusion or deletion of GAEs to Section 232-related rules and notices
for public comment. This will inform BIS going forward on the changing
availability of domestic production. Additionally, BIS will conduct
regular analysis of existing GAEs. The purpose of the GAEs is to ensure
that the Section 232 exclusions process is as efficient as possible,
while also ensuring that BIS does not discourage the domestic
production of any item subject to the process.
    Comment (f)(6): Several commenters suggested that because there is
not a review process, the GAEs essentially cede entire product segments
to foreign competitors.
    BIS response: BIS disagrees with this suggestion. BIS plans to more
routinely issue periodic requests for public comments on proposed
changes to GAEs, and when appropriate can remove GAE eligibility in a
subsequent regulatory action. GAEs are issued based on sustained lack
of successful objections in the Section 232 exclusions process, which
indicates that U.S. industry does not produce the products or
subproducts in question in a sufficient and reasonably available amount
or of a satisfactory quality. GAEs are based on the record of filings
in the Section 232 exclusions process, which provides ample opportunity
for domestic industry to contest such exclusions prior to their
identification as GAEs. Thus, GAEs are meant to cover product segments
for which there is insufficient domestic availability.
    Comment (f)(7): A commentor noted that there should be more
transparency in the process by which BIS determines the products to
remove from the GAE list.
    BIS response: BIS provides a rationale for the decision to remove
or add a GAE in the preamble of the proposed rule announcing any
change. In addition, and as described above, the opportunity for public
participation and clarification of the criteria for the addition or

removal of certain GAEs provides transparency and would be further
improved if the changes in this proposed rule are adopted in final
form.
    Comment (f)(8): One comment suggested that BIS should incorporate
the use of ranges for dimensions of material across HTS codes when
necessary to simplify the process for BIS. while also providing GAEs
for these commonly used imports.
    BIS response: The Section 232 Exclusions Process is based on unique
products within HTSUS codes. However, BIS is open to exploring the
possibility of further incorporating or changing the use of ranges for
dimensions of material in a single exclusion request. BIS will seek
public comment on this matter. See the Request for Public Comments
section for specific information sought.

Section 232 Exclusions Portal

Portal and Form Functionality

    Comment (g)(1): BIS received several comments regarding the
functionality of the Section 232 Exclusions Portal. These included the
use of an auto-fill feature for information and the ability for
requesters to save drafts.
    BIS response: BIS agrees that these are useful suggestions. The
cloning feature addresses the auto-fill request. BIS has now
implemented a draft saving feature.
    Comment (g)(2): Several comments suggested that BIS release more
detailed analyses of exclusion requests, particularly in the event of a
denial, and any relevant internal analysis or communication related to
such requests.
    BIS response: BIS assesses the currently available public
information regarding decisions as adequate, however, BIS is looking at
further ways that additional information can be procured for public
consumption. BIS is committed to transparency in the Section 232
exclusion process decisions.
    Comment (g)(3): At least one comment requested the introduction of
an appeals process to prevent requesters from having to file a new
exclusion and repeat the protracted Section 232 exclusion process.
    BIS response: BIS disagrees with this suggestion. BIS already
provides opportunities for requestors and objectors to expand upon
their claims through rebuttals and surrebuttals. Ultimately, BIS must
enforce a point at which new collection of information ends and a final
decision is rendered by BIS. Requesters who believe they have new and
relevant information can refile without prejudice in the Section 232
Exclusions Portal.

Processing Times

    Comment (h)(1): One commentor suggested that BIS should allow
domestic industry to file requests based on a 6-digit HTSUS
classification number. They noted that BIS previously started allowing
domestic industry to file requests for products that cover a range of
dimensions within a 10-digit HTSUS statistical reporting number. They
assert that this requirement should be loosened to allow requests for a
range of products within a 6-digit HTSUS classification number.
    BIS response: BIS does not agree with this suggestion. The current
Section 232 exclusions process is product based and uses the 10-digit
HTSUS statistical reporting number because that level of specificity is
needed to administer the granted exclusions and analyze the submissions
to the Section 232 exclusions process. It would likely be difficult to
implement and monitor exclusions based on the 6-digit HTSUS
classification number without undergoing a fundamental change to the
Section 232 exclusions process. However, BIS has allowed Requesters to
bundle different products, so long as their technical specifications
fall within a single 10-digit HTSUS statistical reporting number. The
more-general 6-digit HTSUS classification number encompasses so many
products that it would be too prohibitive to administer and not
targeted enough for use under the Section 232 exclusions process.
    Comment (h)(2): Several commentors suggested that if objections
including all necessary public information regarding capacity, lead
time, and quality and a rebuttal is not filed within the seven-day
rebuttal window, BIS should consider the relevant product to be
domestically available and promptly deny the exclusion request. Put
more simply, an objection that does not receive a rebuttal should see
the original exclusion request be automatically denied.
    BIS response: BIS does not agree with this suggestion. BIS is
required to analyze all the information in relation to claims made by
both the requester and objector.
    Comment (h)(3): A commenter suggested that BIS should allow
requesters and those submitting a rebuttal to present a full and
factual account of their efforts to source domestically, including
providing evidence of lack of responsiveness for repeated request for
quotes from domestic producers who continue to file objections.
    BIS response: BIS agrees with this suggestion and encourages
companies to submit such information as part of their exclusion request
or subsequent rebuttal filings whenever they deem such information
relevant. The additional certification for objectors proposed in this
rule also addresses the substance of this comment (described further
below).
    Comment (h)(4): A commenter suggested that BIS should deny
exclusion requests for material that are already available through a
tariff-rate quota (TRQ) or country with an existing agreement in place.
    BIS response: While BIS does not agree with this suggestion, the
addition of new certification language in this proposed rule would
require that, before filing an exclusion request, requesters would need
to certify that they have first made reasonable efforts to source their
product from the United States and then, if unsuccessful in sourcing
from the United States, that they have made reasonable efforts to
source their product from a country with which the United States has
arrived at a satisfactory alternative means to address the threat to
the national security under Section 232.
    Comment (h)(5): BIS received several additional comments regarding
streamlining of the forms or otherwise reducing the administrative
burden associated with the Section 232 exclusions process, such as
including notifications emails from the Section 232 Exclusions Portal
as Section 232 submissions are working their way through the process.
Some of these offered suggestions to alleviate the issue, while others
did not.
    BIS response: BIS is working to reduce the administrative burden
where possible. This feature is already in development. BIS seeks to
have notification emails operational in the coming months and is
continuing to review other ideas for reducing the administrative burden
associated with the Section 232 process.
    Comment (h)(6): One commenter suggested updating several fields in
the portal.
    BIS response: BIS intends to make further changes to the portal,
such as automated notification emails for filing status changes, fields
to input additional importers of record, and internal process
improvements to expedite the administration of decisions. Some of the
requested changes would require resources beyond the Department's
staffing, time, and budget constraints. BIS is currently working to
implement changes in the portal that can be made without costly
programming changes and will roll those out as soon as they are
available.

    Comment (h)(7): A commenter said that BIS should split the Section
232 portal into separate portals for steel and aluminum.
    BIS response: BIS does not agree with this suggestion. Companies
can already filter between steel and aluminum requests with ease. The
BIS website also includes guidance on how to use the portal that helps
provide guidance on these types of questions.
    Comment (h)(8): One commenter stated that BIS should add an option
in the exclusion request form to include multiple residents and non-
resident importers of record to reduce the need for, and volume of,
importer of record change requests.
    BIS response: BIS is currently developing the ability to do this.
BIS anticipates this new feature should be available in the next few
months.

Regulatory Changes

    As detailed above, BIS has outlined the proposed changes as well as
the comments responsible for their proposal. In this section, BIS will
describe the specific changes to the regulatory text, as proposed in
this rule.
    Under paragraphs (c) and (d) to supplement no. 1 to part 705, BIS
is proposing additional certification text. Under paragraph (c)(5)(ii),
certification for volume requested by requesters, BIS is proposing to
revise the introductory paragraph. This proposed change would reduce
the (c)(5)(ii) introductory paragraph to just two sentences with the
substance of the text removed to be added to paragraphs (c)(5)(ii)(A)
through (E), as needed. Under paragraph (c)(5)(ii)(A), BIS is proposing
additional certification text that requesters have first attempted in
good faith in the past calendar year to ``source the requested product
from the United States and then, if unsuccessful in sourcing from the
United States, made reasonable efforts to source the requested product
from a country with which the United States has arrived at a
satisfactory alternative means to address the threat to the national
security under Section 232.'' Also, under paragraph (c)(5)(ii)(A), BIS
proposes text for requesters to certify that they will provide all
documentation justifying the above quoted text simultaneously with the
request submission. This requirement will enable BIS to conduct more
timely and accurate certification reviews and enhance fairness,
transparency, and efficiency in the Section 232 exclusions process for
all parties. Similarly, BIS proposes creating a paragraph (d)(5),
certification of objections submitted. This new paragraph (d)(5) would
add an introductory paragraph to (d)(5), as well as paragraphs
(d)(5)(i) and (ii). These two proposed paragraphs, similar to the
requester certification process review mechanism, would establish a BIS
review mechanism in (d)(5)(ii), like that proposed in (c)(5)(ii)(A).
    This rule also proposes modifying paragraph (d)(4) to specify as
noted above that delivery times are not considered CBI and must be
included in the objection form. The revisions to paragraph (d)(4) also
specify that objections that do not include delivery times in the
public version will be rejected by BIS.
    Much like supplements no. 2 and 3 to part 705 that created GAE
tables for steel and aluminum articles, respectively, this rule
proposes the creation of new supplements no. 4 and 5 to part 705.
Supplement no. 4 would list General Denied Exclusions (GDEs) for steel
articles under the Section 232 exclusions process and supplement no. 5
would list GDEs for aluminum articles under the Section 232 exclusions
process.
    This rule proposes adding a new supplement no. 4 to part 705--
General Denied Exclusions (GDEs) For Steel Articles Under The Section
232 Exclusions Process. This rule also proposes adding a new supplement
no. 5 to part 705--General Denied Exclusions (GDEs) For Aluminum
Articles Under The Section 232 Exclusions Process. Both supplements
would have the same format. Each of the two supplements would include
introductory text to explain the selection process and the role of the
GDEs in the Section 232 exclusions process. Any steel or aluminum
articles identified as a GDE in one of these two supplements must not
be included and would not be considered by BIS in an exclusion request.
Like the GAEs, the steel and aluminum GDEs will be identified in a
table under the respective supplement. Also, like the two GAE
supplements, these two GDE supplements would permit BIS, on behalf of
the Secretary of Commerce, to periodically publish notices of inquiry
in the Federal Register soliciting public comments on potential
removals, revisions or additions to this supplement.
    BIS encourages the public to participate and request changes to
GAEs and GDEs when notices are published seeking comments on GAEs or
GDEs. In other times when a member of the Department of Commerce
receives comments from a party, either verbally or in writing,
regarding requested changes to GAEs or GDEs, it is the practice of the
Department of Commerce to document those interactions publicly so there
is a public record of such interactions. The public record of such
interactions will include a log of the person(s) that petitioned the
Department of Commerce, the date on which the interaction occurred, the
names and title of all persons that were met with at the Department of
Commerce, the mode of communication used (e.g., by email, phone, video
conference, or in person), a copy of any written documents submitted as
part of the interaction, and for verbal communications done over the
phone, internet, or in person, a summary transcript of the interaction
will be included as part of the public record. The public record for
such interactions will be made available to the public.
    At this time, BIS is proposing the framework for identifying GDEs,
but not proposing any specific articles that would qualify for GDE
status.
    BIS is also proposing technical regulatory changes with this
proposed rule. BIS proposes the deletion of examples found in paragraph
(c) of supplement no. 1 to part 705. Given how long the Section 232
exclusions process has been effective, these examples are likely no
longer necessary or useful to the public. As a conforming proposed
change to supplement no. 1, BIS proposes adding a paragraph (h)(v) for
regulations regarding the standard and scope of review for supplement
no. 1 to part 705. The proposed text for paragraph (h)(v) is mostly
made up of text removed from paragraph (c)(6). BIS proposes this change
because they apply to all Section 232 submissions, not just exclusions
requests, as they did under paragraph (c)(6).
    With the proposed addition of supplements nos. 4 and 5, BIS is
proposing changes to the introductory text to supplements nos. 2 and 3.
These proposed changes are to align the introductory text of
supplements nos. 2, 3, 4, and 5 more closely, such that they are more
easily understood by the public. BIS is also proposing revisions
throughout part 705. These revisions make the regulations easier to
understand. These revisions are in paragraphs (c) and (d) in supplement
no. 1 to part 705. Specifically, BIS proposes: (1) adding references to
aluminum products in paragraph (c)(1) and (d)(1), which had been
inadvertently left out; (2) removing ``either'' from (c)(5)(ii)(D),
making it easier to read; (3) adding citations to supplements nos. 2
through 5, a reference to the case-by-case basis of review of
exclusions requests and a sentence noting that the burden is on the
requester to show that the requests

article is ``not produced in the United States in a sufficient and
reasonably available amount or of a satisfactory quality'' to paragraph
(c)(6); (4) in paragraphs (c)(6)(i) and (ii), the term ``end user'' is
being changed to ``user requesting the exclusion,'' a change BIS deems
is a needed clarification, not a policy change; (5) adding more
expansive language to account for single and multiple exclusion
requests, as well as possible approvals and denials of requests to
paragraph (c)(6)(iii); and (6) removing superfluous language and adding
additional specific language to paragraph (d)(4), making it easier to
understand, and by adding a sentence stating that delivery times are
not considered confidential business information and that objections
that do not include delivery times in the public version will be
rejected. These revisions do not alter 232 exclusions policy.

Request for Public Comment

    BIS is seeking public comments on the following issues:
     Changing the Requester Certification Text;
     Requiring Objector Certification;
     Additional evidence requirements for new requester and
objector certifications (i.e., what form should this evidence take and
how should the evidence be defined as sufficient);
     Change in methodology that requires the consolidation of
multiple sizes of a specific product within a specific HTS number and
providing relief for sizes with no objection (comments on this issue
should be specific to the merits and issues associated with this, as
well as how it could be administered);
     Eliminating redundancies in the request and objection
forms by removing the charts and tables on product characteristics and
chemical composition and require a ``full, complete description of the
product'' be provided by the requestor in the noted section of the
questionnaire;
     Clarifying the criteria used for identifying GAEs;
     Whether specific products (e.g., aluminum extrusions;
boxed aluminum foil; flat-rolled stainless steel of a width of less
than 600 millimeters, not further worked than hot-rolled, of a
thickness of less than 4.75 millimeters; and flat wire plated or coated
in zinc) should continue to qualify for a GAE;
     Creating a GDE process;
     The process and frequency with which reviews of the GAE
and GDE processes will undergo, including comments on how often these
reviews should be conducted and the types of information that should be
requested when the reviews are being conducted.
    See the Dates and Addresses of this proposed rule for guidance on
submitting comments.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This proposed rule has been determined to be a
``significant regulatory action,'' although not economically
significant, under section 3(f) of Executive Order 12866. Pursuant to
Proclamations 9704 and 9705 of March 8, 2018, and Proclamations 9776
and 9777 of August 29, 2018, the establishment of procedures for an
exclusions process under each Proclamation shall be published in the
Federal Register.
    2. The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.)
(PRA) provides that an agency generally cannot conduct or sponsor a
collection of information, and no person is required to respond to nor
be subject to a penalty for failure to comply with a collection of
information, unless that collection has obtained Office of Management
and Budget (OMB) approval and displays a currently valid OMB Control
Number.
    This final regulation involves three collections currently approved
by OMB with the following control numbers:
     Exclusions from the Section 232 National Security
Adjustments of Imports of Steel and Aluminum (control number 0694-
0139).
     Objections from the Section 232 National Security
Adjustments of Imports of Steel and Aluminum (control number 0694-
0138).
     Procedures for Submitting Rebuttals and Surrebuttals
Requests for Exclusions from and Objections to the Section 232
Adjustments for Steel and Aluminum (OMB control number 0694-0141).
    This proposed rule is expected to reduce the overall burden hours
and cost associated with the following collections: OMB control numbers
0694-0139, 0694-0138, and 0694-0141. This reduction is expected because
of the revised General Approved Exclusions (GAEs) criteria and the
addition of General Denied Exclusions GDEs for steel and aluminum,
which are expected to result in a decrease of 5,946 exclusion requests
under 0694-0139, 2,806 objection requests under 0694-0138, and 1,946
rebuttals, and surrebuttals under 0694-0141 per year for a total burden
hour savings of 36,954 and 1,367,298 dollars to the public.
    BIS is making a change to the collection for OMB control number
0694-0139 to account for a revised certification under paragraph
(c)(5)(ii) introductory text and one new certification that needs to be
made in the Section 232 Exclusions Portal under paragraph (c)(5)(ii).
These certification changes are expected to be an increase of 4,460
burden hours and an increase of $165,020 dollars to the public. Lastly,
BIS is making a change to the collection for OMB control number 0694-
0138 to account for two new certifications that need to be made in the
Section 232 Exclusions Portal for certifications for objections under
paragraph (d)(5)(i) and (ii). These certification changes are expected
to be an increase of 2,806 burden hours and an increase of $155,733 to
the public. This increase in the burden under OMB control numbers 0694-
0139 and 0694-0138 considers the decreases described above in the total
overall numbers.
    3. This proposed rule does not contain policies with federalism
implications as that term is defined in Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C.
553) requiring notice of proposed rulemaking, the opportunity for
public comment, and a delay in effective date are inapplicable because
this regulation involves a military or foreign affairs function of the
United States. (See 5 U.S.C. 553(a)(1)). As explained in the reports
submitted by the Secretary to the President, steel and aluminum are
being imported into the United States in such quantities or under such
circumstances as to threaten to impair the national security of the
United States, and therefore the President is implementing these
remedial actions (as described Proclamations 9704 and 9705 of March 8,
2018) to protect U.S. national security interests. That implementation
includes the creation of an effective process by which affected
domestic parties can obtain exclusion requests ``based upon specific
national security considerations.'' BIS started this process with the
publication of the March 19 rule and refined the process with the
publication of the September 11 and June 10 rules and is continuing
this process with the publication of this proposed rule. The revisions
to the

exclusion request process are informed by the comments received in
response to the March 19 rule and BIS's experience with managing the
Section 232 exclusions process. Commenters on the past rules (March 19,
September 11, and June 10 rules) were generally supportive and welcomed
the idea of creating an exclusion process, but most of the commenters
believe the exclusion process, although improving over time, still
could be significantly improved for it to achieve the intended purpose.
The commenters identified several areas where transparency,
effectiveness, and fairness of the process could be improved. BIS
understands the importance of having a transparent, fair, and efficient
product exclusion request process, consistent with the directive
provided by the President to create this type of process to mitigate
any unintended consequences of imposing the tariffs on steel and
aluminum to protect critical U.S. national security interests. The
publication of this rulemaking should make further improvements in all
three respects, but because of the scope of this new process, BIS is
publishing this rule as a proposed rule with a request for comments.
    Consistent with the Regulatory Flexibility Act, as amended by the
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (5
U.S.C. 601 et seq.), BIS has prepared the following initial regulatory
flexibility analysis (IRFA) of the impact that this proposed rule, if
adopted, would have on small businesses.

Description of the Reasons Why Action Is Being Considered

    The policy reasons for issuing this proposed rule are discussed in
the background section of the preamble of this document and,
consequently, are not repeated here.

Statement of the Objectives of, and Legal Basis for, the Proposed Rule;
Identification of All Relevant Federal Rules Which May Duplicate,
Overlap or Conflict With the Proposed Rule

    The objective of this proposed rule, and all other Section 232-
related rules published by BIS, are discussed in the background section
of the preamble of this document and, consequently, are not repeated
here. The legal basis for this proposed rule is as follows: Section 232
of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862) and
Reorg. Plan No. 3 of 1979 (44 FR 69273, December 3, 1979).
    No other Federal rules duplicate, overlap, or conflict with this
proposed rule.

Number and Description of Small Entities Regulated by the Proposed
Action

    This proposed rule would apply to all persons engaged in the
Section 232 exclusions process. BIS does not collect or maintain the
data necessary to determine exactly how many of the affected persons
are small entities as that term is used by the Small Business
Administration. However, BIS does ask requestors of the Section 232
exclusions process to self-identify if they are a small business as
defined by the Small Business Administration. From this data, BIS has
estimated the total number of requestors and objectors who are likely
to be small businesses that would be impacted by changes identified in
this proposed rule.
    Roughly 380 requestors self-identified as small businesses, filing
roughly 27,000 exclusion requests in the Section 232 exclusions portal
since March 2022, when we began including the option for requestors to
self-identify as a small business. BIS does not have the same self-
identification option for objectors. However, over the same period,
roughly 100 objectors filed objections in the Section 232 exclusions
portal; many of these are easily identifiable as being large
corporations, not small businesses. Therefore, somewhere between 380
and 500 small businesses could be impacted by these proposed changes.
Specific burden estimates for OMB under control numbers 0694-0139
(Exclusions from the Section 232 National Security Adjustments of
Imports of Steel and Aluminum), 0694-0138 (Objections from the Section
232 National Security Adjustments of Imports of Steel and Aluminum),
and 0694-0141 (Procedures for Submitting Rebuttals and Surrebuttals
Requests for Exclusions from and Objections to the Section 232
Adjustments for Steel and Aluminum) are detailed in paragraph 2 of the
Rulemaking Requirements section above.
    Based on the analysis provided above, the amendments proposed in
this rule would not impose a significant economic impact on a
substantial number of small businesses.

Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Proposed Rule

    The changes proposed in this rule and the corresponding reporting,
recordkeeping, and other compliance requirements are discussed in the
background section of the preamble of this document and, consequently,
are not repeated here. To the extent that compliance with the changes
proposed in this rule would impose a burden on persons, including small
businesses, BIS believes the burden would be minimal.

Significant Alternatives and Underlying Analysis

    As noted above, BIS does not believe that the amendments proposed
in this rule, if published in a final rule, would have a significant
economic impact on small businesses. Nevertheless, consistent with 5
U.S.C. 603(c), BIS considered significant alternatives to these
proposed amendments to assess whether the alternatives would: (1)
accomplish the stated objectives of this proposed rule (consistent with
the objectives of the Section 232 exclusions process); and (2) minimize
any significant economic impact of this proposed rule on small
entities. BIS has determined that proposals detailed above are the
least disruptive alternative for implementing changes to the Section
232 exclusions process.
    Lastly, consistent with 5 U.S.C. 603(c), BIS assessed the use of
performance standards rather than design standards and considered
whether an exemption for small businesses was practical under the
circumstances (i.e., within the context of the changes proposed in this
rule).
    This proposed rule does not contain an exemption for small
businesses from the proposed Section 232 exclusions process changes
because these controls are essential to U.S. national security and BIS'
regulations apply to all parties. An exemption for small businesses
would undermine the effectiveness of these proposed changes.

Conclusion

    BIS has identified proposed changes to the Section 232 exclusions
process. Consequently, consistent with the Regulatory Flexibility Act,
BIS has prepared this IRFA addressing the impact that this proposed
rule, if adopted, would have on small entities. BIS's assessment
indicates that the amendments proposed in this rule would not have a
significant economic impact on a substantial number of small entities.
    Please submit any comments concerning this IRFA in accordance with
the instructions provided in the ADDRESSES section of this proposed
rule.

List of Subjects in 15 CFR Part 705

    Administrative practice and procedure, Business and industry,
Classified information, Confidential business information, Imports,
Investigations, National security.

    For the reasons set forth in the preamble, part 705 of subchapter A
of

15 CFR chapter VII is amended as follows:

PART 705--EFFECT OF IMPORTED ARTICLES ON THE NATIONAL SECURITY

0
1. The authority citation for part 705 continues to read as follows:

    Authority: Section 232 of the Trade Expansion Act of 1962, as
amended (19 U.S.C. 1862) and Reorg. Plan No. 3 of 1979 (44 FR 69273,
December 3, 1979).

0
2. Section 705.1 is revised to read as follows:

Sec.  705.1  Definitions.

    Applicant means the person or entity submitting a request or
application for an investigation pursuant to this part.
    Department means the United States Department of Commerce and
includes the Secretary of Commerce and the Secretary's designees.
    Secretary means the Secretary of Commerce or the Secretary's
designees.
0
3. Supplement no. 1 to part 705 is amended by:
0
a. Revising paragraphs I and (d);
0
b. Revising paragraph (h) introductory text; and
0
c. Adding paragraph (h)(2)(v).
    The revisions and addition read as follows:

Supplement No. 1 to Part 705--Requirements for Submissions Requesting
Exclusions From the Adjustment of Imports of Aluminum and Steel Imposed
Pursuant to Section 232 of the Trade Expansion Act of 1962, as Amended

* * * * *
    (c) Exclusion requests--(1) Who may submit an exclusion request?
Only directly affected individuals or organizations located in the
United States may submit an exclusion request. An individual or
organization is ``directly affected'' if they are using aluminum or
steel in business activities (e.g., construction, manufacturing, or
supplying aluminum or steel product to users) in the United States.
    (2) Identification of exclusion requests. Separate exclusion
requests must be submitted for steel products with chemistry by
percentage breakdown by weight, metallurgical properties, surface
quality (e.g., galvanized, coated), and critical dimensions covered by
a common HTSUS statistical reporting number. Separate exclusion
requests must be submitted for aluminum products with critical
dimensions covered by a common HTSUS statistical reporting number. The
exclusion request forms allow for minimum and maximum dimensions. A
permissible range must be within the minimum and maximum range that is
specified in the HTSUS statistical reporting number and applicable
notes. Separate exclusion requests must also be submitted for products
falling in more than one ten-digit HTSUS statistical reporting number.
BIS will approve exclusions on a product basis, and the approvals will
be limited to the individual or organization that submitted the
specific exclusion request, unless BIS approves a broader application
of the product-based exclusion request to apply to additional
importers. Other directly affected individuals or organizations located
in the United States that wish to submit an exclusion request for a
steel or aluminum product that has already been the subject of an
approved exclusion request may submit an exclusion request under this
supplement. These additional exclusion requests by other directly
affected individuals or organizations in the United States are not
required to reference the previously approved exclusion but are advised
to do so if they want BIS to take that exclusion into account when
reviewing a subsequent exclusion request. Directly affected individuals
and organizations in the United States will not be precluded from
submitting a request for exclusion of a product even though an
exclusion request submitted for that product by another requester or
that requester was denied or is no longer valid.
    (3) Where to submit exclusion requests? All exclusion requests must
be submitted directly on the Section 232 Exclusions Portal (https://www.commerce.gov/page/section-232-investigations).
    (4) No time limit for submitting exclusion requests. Exclusion
requests may be submitted at any time.
    (5)(i) Substance of exclusion requests. An exclusion request must
specify the business activities in the United States within which the
requester is engaged that qualify the individual or organization to be
directly affected and thus eligible to submit an exclusion request. The
request should clearly identify, and provide support for, the basis
upon which the exclusion is sought. An exclusion will only be granted
if an article is not produced in the United States in a sufficient and
reasonably available amount, or of a satisfactory quality, or based
upon specific national security considerations.
    (ii) Certification for volume requested. Effective for all
Exclusion Requests, the undersigned certifies in the Section 232
Exclusions Portal that the information herein supplied in response to
this questionnaire is complete and correct to the best of his/her
knowledge. By signing the certification below, I attest that:
    (A) My organization intends to manufacture, process, or otherwise
transform the imported product for which I have filed an exclusion
request, or I have a purchase order or orders for such products;
    (B) I have personal knowledge or a well-informed basis to state
that my organization has in good faith, within the past 12 months from
submission of this request, first made reasonable efforts to source the
requested product from the United States and then, if unsuccessful in
sourcing from the United States, made reasonable efforts to source the
requested product from a country with which the United States has
arrived at a satisfactory alternative means to address the threat to
the national security under Section 232. Simultaneously with this
submission, my organization is providing evidence of these sourcing
attempts.
    (C) My organization does not intend to use the exclusion for which
I have filed an exclusion request, if granted, solely to hedge or
arbitrage the price;
    (D) My organization expects to consume, sell, or otherwise use the
total volume of product across all my active exclusions and pending
exclusion requests during my organization's business activities within
the next calendar year;
    (E) If my organization is submitting an exclusion request for a
product for which we previously received an exclusion, I certify that
my organization imported the full amount of our approved exclusion(s)
last year or intended to import the full amount but could not due to
one of the following reasons:
    (1) Loss of contract(s);
    (2) Unanticipated business downturns; or
    (3) Other factors that were beyond my organization's control that
directly resulted in less need for steel or aluminum articles; and
    (F) I certify that the exclusion amount requested this year is the
amount that my organization expects to import based on our current
business outlook. If requested by the Department of Commerce, my
organization shall provide documentation that justifies its assertions
in this certification regarding its past and projected imports of steel
or aluminum articles related to the past and current calendar year
exclusion requests.
    Note to paragrapI(c)(5)(i) and (ii): Any exclusion request that
does not include

a certification made in accordance with paraIph (c)(5)(ii) or fully
respond to a request for verification will be treated as an incomplete
submission and will therefore be rejected.
    (6) Criteria used to review exclusion requests. Except as provided
for under supplements nos. 2 through 5 to this part, the U.S.
Department of Commerce will review each exclusion request on a case-by-
case basis to determine whether an article described in an exclusion
request meets any of the following three criteria: the article is not
produced in the United States in an amount that can be delivered in a
time period equal to or less than the time needed for the requester to
obtain the product from their foreign supplier, is not produced in the
United States in a satisfactory quality, or for specific national
security considerations. The burden is on the requester to show that
the article is not produced in the United States in a sufficient and
reasonably available amount or of a satisfactory quality. To provide
additional context on the meaning and application of the criteria,
paIraphs (c)(6)(i) through (iii) of this supplement define keys terms
used in the review criteria. The U.S. Department of Commerce will use
the same criteria identified inIragraphs (c)(6)(i) through (iii) of
this supplement when determining whether it is warranted to approve
broader product-based exclusions based on trends the Department may see
over time with Section 232 submissions. Items for which a broader
determination has been made will be identified in supplements no. 2 or
3 to part 705.
    (i) Not produced in the United States in a sufficient and
reasonably available amount. The exclusion review criterion ``Not
produced in the United States in a sufficient and reasonably available
amount'' means that the amount that is needed by the user requesting
the exclusion is not available immediately in the United States to meet
its specified business activities. Available ``immediately'' means that
a product (whether it is currently being produced in the United States,
or could be produced in the United States) can be produced and
delivered by a U.S. producer ``within eight weeks'' from the receipt of
a binding purchase order, or, if that is not possible, by a date
earlier than the time required for the requester to obtain the entire
quantity of the product from the requester's foreign supplier.
Furthermore, to the extent that an objector can produce and deliver a
portion, which is less than 100 percent, but ten percent or more, of
the amount of steel or aluminum needed in the business activities of
the user requesting the exclusion in the United States described in the
exclusion request, the Department of Commerce may deny a requested
exclusion for that percentage of imported steel or aluminum. It is
incumbent upon both the exclusion requester, and objecting producers,
to provide evidence supporting their claimed delivery times.
    (ii) Not produced in the United States in a satisfactory quality.
The exclusion review criterion ``not produced in the United States in a
satisfactory quality'' does not mean the steel or aluminum needs to be
identical, but it does need to be equivalent as a substitute product.
``Substitute product'' for purposes of this review criterion means that
the steel or aluminum being produced by an objector can meet
``immediately'' Ie paragraph (c)(6)(i) of this supplement) the quality,
regulatory, or testing standards for the U.S.-produced steel to be used
in the business activity in the United States of the user requesting
the exclusion.
    (iii) For specific national security considerations. The exclusion
review criterion ``or for specific national security considerations''
is intended to allow the U.S. Department of Commerce, in consultation
with other parts of the U.S. Government as warranted, to make
determinations whether a particular exclusion request or class of
exclusion requests should be approved or denied based on specific
national security considerations.
    (d) Objections to submitted exclusion requests--(1) Who may submit
an objection to a submitted exclusion request? Any individual or
organization that manufactures steel or aluminum articles in the United
States may file objections to steel or aluminum exclusion requests, but
the U.S. Department of Commerce will only consider information directly
related to the submitted exclusion request that is the subject of the
objection.
    (2) Identification of objections to submitted exclusion requests.
When submitting an objection to a submitted exclusion request, the
objector must locate the exclusion request and submit the objection in
response to the request directly in the Section 232 Exclusions Portal.
Once the relevant exclusion request has been located, an individual or
organization that would like to submit an objection will access the
objection form by scrolling to the bottom of the exclusion request form
and then fill out the web-based form for submitting their objection to
the exclusion request in the Section 232 Exclusions Portal (https://www.commerce.gov/page/section-232-investigations).
    (3) Time limit for submitting objections to submitted exclusions
requests. All objections to submitted exclusion requests must be
submitted directly on the Section 232 Exclusions Portal (https://www.commerce.gov/page/section-232-investigations) no later than 30 days
after the related exclusion request is posted, with the 30-day clock
starting at 11:59 p.m. Eastern Time on the calendar day an exclusion
request is posted.
    (4) Substance of objections to submitted exclusion requests. The
objection should clearly identify, and provide support for, its
opposition to the proposed exclusion, with reference to the specific
basis identified in, and the support provided for, the submitted
exclusion request. The objector must be able to specifically identify
from where and in what timeframe it can produce and deliver the
requested product or a suitable substitute in the quantity requested
and whether it can produce and deliver such product ``immediately''
with reference to the time required for the requester to obtain the
product from its foreign suppliers. The objector must specifically
identify from where and in what timeframe it will be able to produce
and deliver to the requester the quantity of steel or aluminum
requested. It is incumbent on both the exclusion requester, and the
objecting producers, to accurately set forth the time needed for
themselves or their supplier to produce and deliver the product or a
suitable substitute product, from the receipt of a binding purchase
order to ultimate delivery of the material to the domestic facility of
the requester, and to provide supplemental evidence supporting these
claimed timeframes. If the objector does not currently produce the
requested steel or aluminum product, but anticipates starting or
restarting production of the product or its substitute in the future,
the objector must provide as part of the objection a summary timeline
that specifies the steps that will occur over the time needed to
produce that steel or aluminum product. This information will assist
not only the Department of Commerce in its review of the objection, but
also the requester of the exclusion in determining whether to file a
rebuttal to the objection. The above-specified timeframes are not
considered CBI and must be reported where requested in the public
objection form. Objections that do not include these timeframes in the
public version will be rejected by BIS.
    (5) Certification of objection submitted. Effective for all
Objections, the undersigned certifies in the Section 232 Exclusions
Portal that the

information herein supplied in response to this questionnaire is
complete and correct to the best of his/her knowledge. By signing the
certification below, I attest that:
    (i) My organization currently manufactures the requested product at
a facility in the United States and, in response to a written request
by the requester occurring within the year, will offer to sell and make
`immediately available' to the requester the full quantity of the
product at then-existing market rates and terms and in accordance with
the other terms in this Objection.
    (ii) Simultaneously with this objection, my organization is
submitting evidence that it has commercially sold the same product as
that which is being requested within the last 12 months, or evidence
that it has engaged in sales discussions with this requesting company
or company requesting the same product within the last 12 months.
* * * * *
    (h) Disposition of Section 232 submissions--
* * * * *
    (2) * * *
    (v) Standard and scope of review. The review of individual
exclusion requests for products not covered by the categorical
authorizations under supplements nos. 2 or 3, by exclusions denials
under supplements nos. 4 and 5, or decided for national security
considerations, will be made on a case-by-case basis to determine
whether, consistent with these regulations, the requester has shown
that the subject article should be excluded from the tariffs imposed by
Section 232.
* * * * *
0
4. Supplement No. 4 to part 705 is added to read as follows:

Supplement No. 4 to Part 705--General Denied Exclusions (GDEs) for
Steel Articles Under the Section 232 Exclusions Process

    This supplement identifies certain steel articles for import for
which no request for exclusion from the Section 232 tariffs will be
granted or considered by Commerce because requests to exclude these
articles are covered by a General Denied Exclusion (GDE). The Secretary
of Commerce, in consultation with the Secretary of Defense, the
Secretary of the Treasury, the Secretary of State, the United States
Trade Representative, the Assistant to the President for Economic
Policy, the Assistant to the President for National Security Affairs,
and other senior Executive Branch officials as appropriate, makes these
determinations that certain steel articles may be excluded from the
Section 232 exclusions process under a GDE consistent with the
objectives of the Section 232 Exclusions Process as outlined in
supplement no. 1 to this part. The GDEs described in this supplement
apply to any exclusion requester. GDEs do not include quantity limits.
Each GDE identifier will be effective fifteen calendar days after
publication of a Federal Register notice either adding or revising a
specific GDE identifier. For exclusion requests already in the portal
at the time a Federal Register notice is published identifying a new
GDE and up until the effective date of the new GDE, the Section 232
Exclusions Portal will still allow for the submission of objections for
these steel articles. The Commerce review of such exclusion requests
will be informed by the fact that these steel articles will soon be
identified as GDEs. Once a GDE becomes effective, the Section 232
Exclusion Portal will prohibit persons from being able to submit
exclusion requests for these identified GDEs. These GDEs are indefinite
in length, but the Department of Commerce on behalf of the Secretary of
Commerce may at any time issue a Federal Register notice removing,
revising or adding to an existing GDE in this supplement as warranted
to align with the objectives of the Section 232 exclusions process as
described in supplement no. 1 to this part. GDEs are limited to steel
articles that have consistently not been approved for exclusions under
the Section 232 exclusions. The Department of Commerce on behalf of the
Secretary of Commerce may periodically publish notices of inquiry in
the Federal Register soliciting public comments on potential removals,
revisions or additions to this supplement.

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
GDE Identifier.          Description of Steel That May Not Be     Other Limitations.      Federal Register
                          Requested in an Exclusion Request (at                            Citation.
                          10-digit Harmonized Tariff Schedule of
                          the United States (HTSUS) statistical
                          reporting number or more narrowly
                          defined at product level).
----------------------------------------------------------------------------------------------------------------

0
4. Supplement No. 5 to part 705 is added to read as follows:

Supplement No. 5 to Part 705--General Denied Exclusions (GDEs) for
Aluminum Articles Under the Section 232 Exclusions Process

    This supplement identifies aluminum articles that may not be
included in the Section 232 exclusion requests because these articles
have been denied from import under a General Denied Exclusion (GDE).
The Secretary of Commerce, in consultation with the Secretary of
Defense, the Secretary of the Treasury, the Secretary of State, the
United States Trade Representative, the Assistant to the President for
Economic Policy, the Assistant to the President for National Security
Affairs, and other senior Executive Branch officials as appropriate,
makes these determinations that certain aluminum articles are excluded
from the Section 232 exclusions process by being identified under a GDE
consistent with the objectives of the Section 232 exclusions process as
outlined in supplement no. 1 to this part. GDEs are limited to aluminum
articles that have consistently not been approved for exclusions under
the Section 232 exclusions. Because these aluminum articles have
consistently not been approved, it has been determined by the relevant
agencies to be warranted to exclude these identified articles from the
Section 232 exclusions process. Inclusion of these articles as GDEs
will ease the burden on objectors from having to review exclusions
requesters where it has already been demonstrated consistently that
such articles should not be approved in exclusion requests. The GDEs
described in this supplement apply to any exclusion requester. GDEs do
not include quantity limits. Each GDE identifier will be effective
fifteen calendar days after publication of a Federal Register notice
either adding or revising a specific GDE identifier. For exclusion
requests already in process at the time a Federal Register notice is
published identifying a new GDE and up until the effective date of the
new GDE, the Section 232 Exclusions Portal will still allow for the
submission of exclusion requests for these aluminum articles. The
Commerce review of such exclusion requests will be informed by the fact
that these aluminum articles will soon be identified as GDEs. Once a
GDE becomes effective, the Section 232

Exclusion Portal will prohibit persons from being able to submit
exclusion requests for these identified GDEs. These GDEs are indefinite
in length, but the Department of Commerce on behalf of the Secretary of
Commerce may at any time issue a Federal Register notice removing,
revising or adding to an existing GDE in this supplement as warranted
to align with the objectives of the Section 232 exclusions process as
described in supplement no. 1 to this part. The Department of Commerce
on behalf of the Secretary of Commerce may periodically publish notices
of inquiry in the Federal Register soliciting public comments on
potential removals, revisions or additions to this supplement.

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
GDE Identifier.          Description of Aluminum That May Not Be  Other Limitations.      Federal Register
                          Requested in an Exclusion Request (at                            Citation.
                          10-digit Harmonized Tariff Schedule of
                          the United States (HTSUS) statistical
                          reporting number or more narrowly
                          defined at product level).
----------------------------------------------------------------------------------------------------------------

Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2023-18328 Filed 8-25-23; 8:45 am]
BILLING CODE 3510-33-P