§ 4532. Special rules for automotive goods

§ 4532. Special rules for automotive goods

(a) Definitions In this section:

(1) Alternative staging regime The term “alternative staging regime” means the application, pursuant to subsection (d), of the requirements of article 8 of the automotive appendix to the production of covered vehicles to allow producers of such vehicles to bring such production into compliance with the requirements of articles 2 through 7 of that appendix.

(2) Alternative staging regime period The term “alternative staging regime period” means the period during which the alternative staging regime is in effect.

(3) Automotive appendix The term “automotive appendix” means the Appendix to Annex 4–B of the USMCA (relating to the product-specific rules of origin for automotive goods).

(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 The term “automotive rules of origin” means the rules of origin for automotive goods set forth in the automotive appendix.

(6) Commissioner The term “Commissioner” means the Commissioner of U.S. Customs and Border Protection.

(7) Covered vehicle The term “covered vehicle” means a passenger vehicle, light truck, or heavy truck.

(8) Interagency committee The term “interagency committee” means the interagency committee established under subsection (b)(1).

(9) Passenger vehicle; light truck; heavy truck The terms “passenger vehicle”, “light truck”, and “heavy truck” have the meanings given those terms in article 1 of the automotive appendix.

(10) USMCA country The term “USMCA country” means the United States, Canada, or Mexico for such time as the USMCA is in force with respect to Canada or Mexico, and the United States applies the USMCA to Canada or Mexico.

(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 The chair of the interagency committee shall be the Trade Representative.

(4) Use of information

(A) Information sharing Notwithstanding any other provision of law, the members of the interagency committee may exchange information for purposes of carrying out this section.

(B) Confidentiality of information The interagency committee and any Federal agency represented on the interagency committee may not disclose to the public any confidential documents or information received in the course of carrying out this section, except information aggregated to preserve confidentiality and used in the reports described in subsection (g).

(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 The Secretary of the Treasury, in consultation with the Secretary of Labor, shall prescribe regulations to carry out this paragraph, including regulations setting forth the procedures and requirements for a producer of covered vehicles to establish that the producer meets the labor value content requirements for preferential tariff treatment.

(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 The Secretary of the Treasury shall prescribe regulations to carry out this paragraph, including regulations setting forth the procedures and requirements for a producer of covered vehicles to establish that the producer meets the steel and aluminum purchase requirements for preferential tariff treatment.

(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 11 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 The Trade Representative shall maintain, and update as necessary, a public list of the producers of covered vehicles that have been authorized to use the alternative staging regime.

(C) Reporting Before a determination is made with respect to whether to authorize the use of the alternative staging regime, the Trade Representative shall provide to the appropriate congressional committees a summary of requests for the alternative staging regime.

(4) Alternative staging regime review and modification

(A) Material changes to circumstances

(i) Notification If the request of a producer to use the alternative staging regime for 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 has been granted, the producer shall notify the Trade Representative and the interagency committee of any material changes to the information contained in the request, including any supplemental information relating to that request, and of any material changes to circumstances, that will affect the producer’s ability to meet any of the requirements set forth in articles 2 through 7 of the automotive appendix after the alternative staging regime period has expired.

(ii) Requests for modification of plans

(I) In general A producer that submits a notification under clause (i) with respect to a change described in that clause may submit to the Trade Representative and the interagency committee a request for modification of its plan.

(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 If the Trade Representative, in consultation with the interagency committee, determines that the information provided by a producer under clause (i) demonstrates that 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, the Trade Representative shall notify the producer in writing, and no claim for preferential tariff treatment may be made, on or after the date of the determination, with respect to a covered vehicle of the producer pursuant to the alternative staging regime.

(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 As part of a verification conducted under section 4533 of this title, the Secretary of the Treasury, in conjunction with the Secretary of Labor, may conduct a verification of whether a covered vehicle complies with 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.