05 Apr 2024 | 20:07 UTC

US deploys new filing system for steel under quota from South Korea

Highlights

New process takes effect April 22

Incorrect filing rejections will start May 20

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US Customs and Border Protection will now require importers of quota-subject steel products from South Korea to submit certifications through a new system to better enforce quota monitoring, duties and expectations set forth in a 2018 agreement, the agency said April 5.

"The export certification requirement for imports of steel products from South Korea that are subject to an absolute quota will be collected through the Electronic Certification System (eCERT)," CBP said in a Federal Register notice.

"As a result, all imports of steel from South Korea that are subject to an absolute quota must have a valid export certificate with a corresponding eCERT transmission at the time of entry for consumption or withdrawal from warehouse for consumption," it added. "The transition to eCERT will not change the quota filing process or requirements."

Filings through the eCERT process will be required for steel entered, or withdrawn from a warehouse, for consumption on or after April 22, and CBP will automatically reject filings without correct eCERT information starting on May 20, the agency said.

Certificates since 2018 duties, quotas

The quotas and filing certification requirements for steel imports from South Korea began following the US' institution of a 25% duty on steel imports from all foreign countries in 2018. The tariff was enforced by former President Donald Trump under Section 232 of the Trade Expansion Act of 1962.

Later in 2018, the US reached separate agreements with several trade partners to either provide a full exemption from the tariff or to provide a quota that would allow a certain volume of steel products to be imported duty-free. South Korea was among the countries that were granted a quota(opens in a new tab).

Imports of steel from South Korea were initially, at the time, subject to a product-specific quota equivalent to 70% of the average annual import volume of such products during the period of 2015-2017, according to the US Trade Representative's office. This represented a cumulative quota of about 2.63 million mt.

To comply with the quota, the subject countries including South Korea were encouraged by the US to establish a mechanism for the certification of exports of subject steel products to the US. If a system was implemented, then CBP would potentially require that importers also provide proper certification to verify compliance with the quota.

South Korea ultimately established an export certification system in 2019, triggering CBP to require reciprocal certification filings from US importers. However, CBP's system has been unable to properly enforce this requirement. For instance, importers who have failed to provide correct export certificates have received warning messages, but their shipments have not been rejected, according to CBP.

New system

The new eCERT system seeks "to facilitate the administration of quotas and ensure that the proper restraint levels are charged without being exceeded."

"CBP has coordinated with South Korea to implement the eCERT process, and now South Korea is ready to participate in this process by transmitting its export certificates to CBP via eCERT," CBP said.

Importers that do not provide a correct certificate number will have shipments rejected, it added.

Quotas

Quotas on US steel imports from South Korea are confirmed on a quarterly and annual basis by CBP, and they have mostly remained consistent since 2018.

Various quota thresholds are provided for the dozens of subject steel products. For instance, quotas specifically for steel hot-rolled coil imports from South Korea are set at 404,694 mt for 2024 and 121,408 mt for the second quarter, according to CBP's quota bulletin.

The US imported about 2.39 million mt of steel from South Korea in 2023, according to US Commerce Department data. The country was the fourth-largest source of US steel imports. Annual volumes have generally remained between 2.3 million mt and 2.6 million mt in most years since 2018.


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