The process is called the Miscellaneous Tariff Bill ("MTB") and was around since the 1980s. The way it worked was companies would go to a senator or representative with a list of requests for duty suspensions. A bill would be filed for each requested suspension. Then, months later, after an investigation by the International Trade Commission ("ITC"), all the requests filed by all the senators and members of congress would be put into one huge bill which, by rule, could pass only by unanimous consent. The result, for the successful requests, was a two year suspension in the collection of duties. Congress did an MTB every two years, so the suspensions always got renewed.
Then the system broke down over partisan politics. No MTB has been passed in years and the last the duty suspensions expired at the end of 2012.
Now there is a new non-political systems. Members of congress cannot file for duty suspensions. Rather a company (or more likely a company's lawyer, lobbyist, or consultant) files directly with the ITC which then conducts an investigation into each request and then gives congress the list of all the request that qualify, which then gets voted as the MTB (I’m leaving out some dull steps in between).
There are three criteria the ITC looks at--
1. Is it non-controversial, meaning are there no domestic producers of the product or a like product who will oppose.
2. Is the total annual tariff revenue lost to the U.S. treasury no greater than $500,000. That cap is applied per item. So in the case of the 11 items listed below they do that calculation 11 times, it’s not an over all number. Even if a single item goes over the $500,000 you can still get a reduction in duty. Say something has 10% rate of duty and total suspension of duty would cost the government $1 million, what they would do is lower the duty to 5%, to make the total industry savings $500,000.
3. It must be “administrable” meaning when goods are presented for entry and claim duty free under the MTB, Customs has to be able to examine the merchandise and determine whether it is. So you cannot do an MTB based on end use.
The new ITC system asks for more information than the old congressional one, so there is some burden. The window for filing for duty suspensions opens Friday, October 14th, and continues for 60 days. For more information, or to find out how your could benefit from a duty suspension under the new MTB procedures, contact David Trumbull at david@agathonassociates.com.
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