Companies considering increased imports of polysilicon and certain solar-related products before new Section 232 tariffs and minimum import prices take effect on December 4 should carefully evaluate a recently issued Department of Commerce rule addressing potential stockpiling.
On September 22, the Department of Commerce’s Bureau of Industry and Security issued a temporary final rule implementing President Trump’s directive in Proclamation 11052.  The rule establishes a framework through which Commerce and U.S. Customs and Border Protection (CBP) may restrict certain imports that Commerce determines constitute stockpiling in advance of the December 4 implementation date.
The rule applies to both existing and newly established importers of record (IORs).  It also outlines compliance considerations for customs brokers involved in entries of covered merchandise.
Review of Increased Imports by Existing IORs
Commerce is monitoring imports of covered polysilicon and solar-related products and may determine that an existing IOR is engaged in stockpiling if its import volumes significantly exceed historical levels.
In evaluating an importer’s activity, Commerce may consider:
If Commerce determines that an IOR has engaged in stockpiling, it may direct CBP to prohibit that importer from making additional entries of covered products before December 4, unless Commerce grants a waiver.
CBP has clarified that an importer subject to such a restriction may continue to move covered merchandise into a bonded warehouse.  The merchandise, however, may not be entered for consumption before December 4.
Weekly Limits for Newly Established IORs
The rule also establishes weekly import limits for IORs registered with CBP on or after August 6.
Unless Commerce grants prior approval, these IORs are subject to the following limits:
A newly established IOR that exceeds the applicable weekly limit without Commerce approval may be prohibited from making further entries of covered merchandise before December 4.
Commerce states that these limits are based on historical import patterns.  According to Commerce, the limits are intended to allow legitimate new market participants to continue importing while reducing the possibility that newly established entities will be used to circumvent the stockpiling restrictions.
Compliance Considerations for Customs Brokers
The rule also addresses the potential use of multiple IORs, affiliated entities, or related parties to avoid applicable import restrictions.
Commerce and CBP have indicated that customs brokers may face enforcement consequences if they facilitate circumvention arrangements.  Brokers handling entries of covered merchandise therefore may need to consider:
CBP has indicated that brokers involved in circumvention schemes may be subject to enforcement measures, including monetary penalties and the potential suspension or revocation of broker licenses.
The rule therefore may require brokers to conduct additional diligence concerning ownership, affiliation, and end-user relationships when processing entries involving covered products.
Waiver Process
The rule establishes a waiver process for both existing and newly established IORs.
Commerce states that it intends to respond to waiver requests within 14 days.  The waiver process includes specified submission, certification, and information requirements.  Companies that anticipate seeking a waiver should review those requirements and allow sufficient time to prepare the necessary supporting information.
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