19 USC 4532 - Special rules for automotive goods

U.S Code last checked for updates: Nov 22, 2024

§ 4532.

Special rules for automotive goods

(a)

Definitions

In this section:

(1)

Alternative staging regime

(2)

Alternative staging regime period

(3)

Automotive appendix

(4)

Automotive good

The term “automotive good” means—

(A)

a covered vehicle; or

(B)

a part, component, or material listed in table A.1, A.2, B, C, D, or E of the automotive appendix.

(5)

Automotive rules of origin

(6)

Commissioner

(7)

Covered vehicle

(8)

Interagency committee

(9)

Passenger vehicle; light truck; heavy truck

(10)

USMCA country

(b)

Establishment of interagency committee

(1)

In general

Not later than 30 days after January 29, 2020, the President shall establish an interagency committee—

(A)

to provide advice, as appropriate, on the implementation, enforcement, and modification of provisions of the USMCA that relate to automotive goods, including the alternative staging regime; and

(B)

to review the operation of the USMCA with respect to trade in automotive goods, including—

(i)

the economic effects of the automotive rules of origin on the United States economy, workers, and consumers; and

(ii)

the impact of new technology on such rules of origin.

(2)

Members

The members of the interagency committee shall be the following:

(A)

The Trade Representative.

(B)

The Secretary of Commerce.

(C)

The Commissioner.

(D)

The Secretary of Labor.

(E)

The Chair of the International Trade Commission.

(F)

Any other members determined to be necessary by the Trade Representative.

(3)

Chair

(4)

Use of information

(A)

Information sharing

(B)

Confidentiality of information

(c)

Certification requirements

(1)

Certification relating to labor value content requirements

(A)

In general

A covered vehicle shall be eligible for preferential tariff treatment only if the producer of the covered vehicle—

(i)

provides a certification to the Commissioner that the production of covered vehicles by the producer meets the labor value content requirements, including the high-wage material and manufacturing expenditures, high-wage technology expenditures, and high-wage assembly expenditures, as set forth in article 7 of the automotive appendix or, if the producer is subject to the alternative staging regime, articles 7 and 8 of that appendix, and includes the calculations of the producer related to the labor value content requirements; and

(ii)

has information on record to support those calculations.

(B)

Implementation

For purposes of meeting the requirements under subparagraph (A)—

(i)

the Secretary of Labor, in consultation with the Commissioner, shall ensure that the certification of a producer under subparagraph (A)(i) does not contain omissions or errors before the certification is considered properly filed; and

(ii)

a calculation described in subparagraph (A)(i) based on a producer’s preceding fiscal or calendar year is valid for the producer’s subsequent fiscal or calendar year, as the case may be, as set forth in articles 7 and 8 of the automotive appendix.

(C)

Regulations required

(2)

Certification relating to steel and aluminum purchase requirements

(A)

In general

A covered vehicle shall be eligible for preferential tariff treatment only if the producer of the covered vehicle—

(i)

provides a certification to the Commissioner that the production of covered vehicles by the producer meets the steel and aluminum purchase requirements set forth in article 6 of the automotive appendix or, if the producer is subject to the alternative staging regime, articles 6 and 8 of that appendix; and

(ii)

has information on record to support the calculations relied on for the certification.

(B)

Implementation

For purposes of meeting the requirements under subparagraph (A)—

(i)

the Commissioner shall ensure that the certification of a producer under subparagraph (A)(i) does not contain omissions or errors before the certification is considered properly filed; and

(ii)

a calculation described in subparagraph (A)(ii) based on a producer’s preceding fiscal or calendar year is valid for the producer’s subsequent fiscal or calendar year, as the case may be, as set forth in articles 6 and 8 of the automotive appendix.

(C)

Regulations required

(d)

Alternative staging regime

(1)

Publication of requirements

Not later than 90 days after January 29, 2020, the Trade Representative, in consultation with the interagency committee, shall publish in the Federal Register requirements, procedures, and guidance required to implement the alternative staging regime, including with respect to the following:

(A)

The procedures, calculation methodology, timeframe, specific regional value content thresholds, and other minimum requirements, consistent with article 8 of the automotive appendix, with which a producer of covered vehicles subject to the alternative staging regime is required to comply during the alternative staging regime period for such vehicles to be eligible for preferential tariff treatment pursuant to the alternative staging regime.

(B)

The date by which requests for the alternative staging regime are required to be submitted.

(C)

The information a producer of passenger vehicles or light trucks is required to provide, in the producer’s request to use the alternative staging regime, to demonstrate the actions that the producer will take to be prepared to meet all the requirements set forth in articles 2 through 7 of the automotive appendix after the alternative staging regime period has expired, including the following:

(i)

A statement identifying which of the requirements set forth in articles 2 through 7 of the automotive appendix that the producer expects it will be unable to meet upon entry into force of the USMCA based on current business plans.

(ii)

A statement indicating whether the passenger vehicles or light trucks for which the producer seeks to use the alternative staging regime account for 10 percent or less, or more than 10 percent, of the total production of passenger vehicles or light trucks, as the case may be, in USMCA countries by the producer during the 12-month period preceding the date on which the USMCA enters into force, or the average of such production during the 36-month period preceding that date, whichever is greater.

(iii)

In the case of a producer that seeks to use the alternative staging regime for more than 10 percent of the producer’s total production of passenger vehicles or light trucks, as the case may be, in USMCA countries—

(I)

a detailed and credible plan describing with specificity the actions the producer intends to take to bring production of the passenger vehicles or light trucks, as the case may be, into compliance with the requirements set forth in articles 2 through 7 of the automotive appendix after the alternative staging regime period expires; and

(II)

a statement indicating the time period for which the producer is requesting to use the alternative staging regime, if that time period is greater than 5 years after the USMCA enters into force.

(D)

The procedures for accepting and reviewing requests for the alternative staging regime, including that the Trade Representative will—

(i)

notify a producer of any deficiencies in the request of the producer that would result in a denial of the request not later than 30 days after the request is submitted; and

(ii)

provide producers the opportunity to submit supplemental information.

(E)

The criteria the Trade Representative, in consultation with the interagency committee, will consider when determining whether to approve a request for the alternative staging regime. Such criteria shall only include elements necessary for the producer to demonstrate the producer’s ability to meet the requirements specified in subparagraphs (A) and (B). The criteria shall also describe the information to meet those requirements in sufficient detail to allow the producer to identify the information necessary to complete a request for the alternative staging regime.

(F)

The opportunity for a producer described in subparagraph (C)(iii) to modify the producer’s request for the alternative staging regime.

(2)

Review of requests for alternative staging regime

(A)

In general

In reviewing the request of a producer of passenger vehicles or light trucks for the alternative staging regime, the Trade Representative, in consultation with the interagency committee, shall determine—

(i)

whether the request covers 10 percent or less, or more than 10 percent, of the production of passenger vehicles or light trucks in USMCA countries by the producer; and

(ii)

whether the producer has identified with specificity which of the requirements set forth in articles 2 through 7 of the automotive appendix the producer is unable to meet based on current business plans.

(B)

Approval of alternative staging regime for passenger vehicle or light truck production not exceeding 10 percent of North American production

The Trade Representative shall authorize the use of the alternative staging regime if the Trade Representative, in consultation with the interagency committee, determines that—

(i)

the request for the alternative staging regime covers passenger vehicles or light trucks that do not exceed 10 percent of the production of passenger vehicles or lights 1

 So in original. Probably should be “light”.

trucks, as the case may be, in USMCA countries by the producer; and

(ii)

the producer has identified with specificity which of the requirements set forth in articles 2 through 7 of the automotive appendix the producer is unable to meet based on current business plans.

(C)

Approval of alternative staging regime for passenger vehicle or light truck production exceeding 10 percent of North American production

The Trade Representative shall authorize the use of the alternative staging regime if the Trade Representative, in consultation with the interagency committee, determines that—

(i)

the request for the alternative staging regime covers more than 10 percent of the production of passenger vehicles or lights ¹ trucks, as the case may be, in USMCA countries by the producer;

(ii)

the producer has identified with specificity which of the requirements set forth in articles 2 through 7 of the automotive appendix the producer is unable to meet based on current business plans; and

(iii)

the detailed and credible plan of the producer submitted under paragraph (1)(C)(iii) is based on substantial evidence and reasonably calculated to bring the production of the passenger vehicles or light trucks, as the case may be, into compliance with the requirements set forth in articles 2 through 7 of the automotive appendix after the alternative staging regime period has expired.

(3)

Procedures related to reviewing and approving requests

(A)

Deadline for review

Not later than 120 days after receiving a request of a producer for the alternative staging regime, the Trade Representative, in consultation with the interagency committee, shall—

(i)

review the request;

(ii)

make a determination with respect to whether to authorize the use of the alternative staging regime; and

(iii)

provide to each producer a response in writing stating whether the producer may use the alternative staging regime.

(B)

Establishment of a public list

(C)

Reporting

(4)

Alternative staging regime review and modification

(A)

Material changes to circumstances

(i)

Notification

(ii)

Requests for modification of plans

(I)

In general

(II)

Determination regarding modification

Not later than 90 days after receiving a request submitted under subclause (I), the Trade Representative, in consultation with the interagency committee, shall—

(aa)

review the request;

(bb)

make a determination with respect to whether the modified plan is based on substantial evidence and reasonably calculated to ensure that the producer will still be able to meet the requirements set forth in articles 2 through 7 of the automotive appendix after the alternative staging regime period has expired;

(cc)

if the Trade Representative makes an affirmative determination under item (bb), approve the modified plan; and

(dd)

notify the producer in writing of the determination.

(iii)

Inability to meet requirements

(5)

Failure to meet requirements for alternative staging regime

(A)

In general

If, at any time, the Trade Representative, in consultation with the interagency committee, makes a determination described in subparagraph (B) with respect to a producer of covered vehicles subject to the alternative staging regime—

(i)

any claim for preferential tariff treatment under the alternative staging regime for any covered vehicle of that producer shall be considered invalid; and

(ii)

notwithstanding the finality of a liquidation of an entry, the importer of any covered vehicle of that producer shall be liable for the duties, taxes, and fees that would have been applicable to that vehicle if preferential tariff treatment pursuant to the alternative staging regime had not applied when the vehicle was entered for consumption, or withdrawn from warehouse for consumption, plus interest assessed on or after the date of entry and before the date of the determination.

(B)

Determination described

A determination described in this subparagraph is a determination that a producer of covered vehicles subject to the alternative staging regime—

(i)

has failed to take the steps set forth in the producer’s request for the alternative staging regime and, as a result of that failure, the producer will no longer be able to meet the requirements set forth in articles 2 through 7 of the automotive appendix after the alternative staging regime period has expired;

(ii)

has provided false or misleading information in the producer’s request; or

(iii)

in the case of a producer authorized to use the alternative staging regime for more than 10 percent of the total production of passenger vehicles or light trucks in USMCA countries by the producer, has failed to notify the Trade Representative under paragraph (4)(A) of material changes to circumstances that will prevent the producer from meeting any of the requirements set forth in articles 2 through 7 of the automotive appendix after the alternative staging regime period has expired.

(e)

Verification of labor value content requirements

(1)

In general

(2)

Role of Secretary of Labor

(3)

Role of Secretary of the Treasury

The Secretary of the Treasury shall participate in any verification conducted under paragraph (1) by verifying—

(A)

the components of the labor value content requirements not covered by paragraph (2), including the annual purchase value and cost components of the high-wage material and manufacturing expenditures, within the meaning given those terms in article 7 of that appendix; and

(B)

whether the producer has met the labor value content requirements.

(4)

Actions by Secretary of Labor

(A)

In general

In participating in a verification conducted under paragraph (1), the Secretary of Labor shall assist the Secretary of the Treasury to do the following:

(i)

Examine, or cause to be examined, upon reasonable notice, any record (including any statement, declaration, document, or electronically generated or machine readable data) described in the notice with reasonable specificity.

(ii)

Request information from any officer, employee, or agent of a producer of automotive goods, as necessary, that may be relevant with respect to whether the production of covered vehicles meets the high-wage components of the labor value content requirements set forth in article 7 of the automotive appendix or, if the producer is subject to the alternative staging regime under subsection (d), articles 7 and 8 of that appendix.

(B)

Nature of information requested

(5)

Whistleblower protections

(A)

Unlawful acts

It is unlawful to intimidate, threaten, restrain, coerce, blacklist, discharge, or in any other manner discriminate against any person for—

(i)

disclosing information to a Federal agency or to any person relating to a verification under this subsection; or

(ii)

cooperating or seeking to cooperate in a verification under this subsection.

(B)

Enforcement

(6)

Protests of decisions of U.S. Customs and Border Protection

(A)

In general

If a protest under section 1514 of this title of a decision of U.S. Customs and Border Protection with respect to the eligibility for preferential tariff treatment of a covered vehicle relates to the analysis of the Department of Labor relating to the high-wage components of the labor value content requirements described in paragraph (1), the Secretary of Labor shall—

(i)

conduct an administrative review of the portion of the decision relating to such requirements; and

(ii)

provide the results of that review to the Commissioner.

(B)

No accelerated disposition

(f)

Administration by Department of Labor

(g)

Review and reports

(1)

Periodic review on automotive rules of origin

(A)

In general

The Trade Representative, in consultation with the interagency committee, shall conduct a biennial review of the operation of the USMCA with respect to trade in automotive goods, including—

(i)

to the extent practicable, a summary of actions taken by producers to demonstrate compliance with the automotive rules of origin, use of the alternative staging regime, enforcement of such rules of origin, and other relevant matters; and

(ii)

whether the automotive rules of origin are effective and relevant in light of new technology and changes in the content, production processes, and character of automotive goods.

(B)

Report

(i)

In general

(ii)

Initial report

(iii)

Termination of reporting requirement

(2)

Report by International Trade Commission

Not later than 1 year after the submission of the first report required by paragraph (1)(B), and every 2 years thereafter until the date that is 12 years after the date on which the USMCA enters into force, the International Trade Commission shall submit to the appropriate congressional committees and the President a report on—

(A)

the economic impact of the automotive rules of origin on—

(i)

the gross domestic product of the United States;

(ii)

exports from and imports into the United States;

(iii)

aggregate employment and employment opportunities in the United States;

(iv)

production, investment, use of productive facilities, and profit levels in the automotive industries and other pertinent industries in the United States affected by the automotive rules of origin;

(v)

wages and employment of workers in the automotive sector in the United States; and

(vi)

the interests of consumers in the United States;

(B)

the operation of the automotive rules of origin and their effects on the competitiveness of the United States with respect to production and trade in automotive goods, taking into account developments in technology, production processes, or other related matters;

(C)

whether the automotive rules of origin are relevant in light of technological changes in the United States; and

(D)

such other matters as the International Trade Commission considers relevant to the economic impact of the automotive rules of origin, including prices, sales, inventories, patterns of demand, capital investment, obsolescence of equipment, and diversification of production in the United States.

(3)

Report by Comptroller General

(4)

Public participation

Before submitting a report under paragraph (1)(B) or (2), the agency responsible for the report shall—

(A)

solicit information relating to matters that will be addressed in the report from producers of automotive goods, labor organizations, and other interested parties;

(B)

provide for an opportunity for the submission of comments, orally or in writing, from members of the public relating to such matters; and

(C)

after submitting the report, post a version of the report appropriate for public viewing on a publicly available internet website for the agency.

(h)

Effective date

This section shall—

(1)

take effect on January 29, 2020; and

(2)

apply with respect to goods entered, or withdrawn from warehouse for consumption, on or after the date on which the USMCA enters into force.

(Pub. L. 116–113, title II, § 202A, Jan. 29, 2020, 134 Stat. 33.)

cite as: 19 USC 4532