Ask Deanna: A Vape Biz & Legal Insights Column

What is ‘Ask Deanna – A Vape Biz & Legal Insights Column?’

This is B2B Wholesaler’s newest column to give guidance to vape and hemp industry stakeholders about their business and legal questions.

Get Your Money Back!

Did you know virtually all vape devices and components are imported from China? Indeed they are, and for this reason getting your money back is the theme of this month’s column as the portal for requesting an exclusion from the increase in customs duties on imports affected by the China Tariffs action is now open with the US Trade Representatives Office (USTR).

If you have friends who import and have been paying this extra tax, share this article with them so they can try and do something about it. The deadline to file is 9/30/19 so there isn’t much time left to do it. For information on the background and impact of the China Tariffs, check out page 178 of June 2019 Issue at www.b2bwholesalermag.com. You can also read my detailed article (dated 5/22/19) in the Legal Guides section of my firm’s website at www.clarkespositolaw.com entitled, “Section 301 China Tariff Increase – Effective May 10, 2019.”

In a nutshell, what are the “China Tariffs?”

In a nutshell, the Section 301 China Tariff increase spearheaded by President Trump led to thousands of imported goods having the burden of an additional 25% in customs duties assessed on them. That meant that US importers – namely, our friends, neighbors and family - now had to pay in taxes to the federal government this extra money (i.e., an extra $25 for every $100 worth of imported goods) on top of what they already had to pay.

What is an Exclusion Request?

This is the request an importer can make to have its imported products excluded from this mandatory additional tax (duties).

Is an Exclusion Request based on the product or tariff number?

Both. An importer may have several types of articles it imports which use the same HTSUS number. As a result, an Exclusion Request (while identifying the HTSUS number) is required to be submitted on a per product basis. Therefore, an importer is encouraged to submit a request for each of its different products in order to have the best chance at having its request granted. This is because in the event the Exclusion Request is granted, all products classified under that HTSUS number will be excluded.

What is considered a “single product?”

A single product is an article that may come in different flavors, colors, and sizes, and therefore have multiple SKUs for the same single product type.

What happens if my product(s) is excluded?

An importer may then go back and recover the additional duties on entries dating back to September 24, 2018, and extending one year after the publication of the exclusion determination in the Federal Register.

How long does it take to receive an answer from USTR?

On average, it is taking over 6 months.

What is the chance of me getting my Exclusion Request granted?

So far it has been about an 18% acceptance rate.

Why would I want a letter prepared for submission by a third-party?

The exclusion process is a public one whereby third-parties may lend support, or opposition, to your application. Having a well organized third-party submission in support of your application shows the broader impact that the grant by the USTR of a request would have, potentially strengthening your position.

What happens if I don’t file an Exclusion Request?

Then you will continue to pay the additional duties. At least by submitting one, you give yourself the opportunity to overcome paying them for a period of time and can recover duties already paid on entries dating back to September 18, 2018 and in to the future as described above.

How Do I Make an Exclusion Request?

Exclusion requests can be made through the USTR government’s website at http://exclusions.ustr.gov. You will first be prompted to register as a requester. You may then follow the instructions as prompted to file your application, and you have an option to file a business confidential version in addition to a public one. Be sure and have your financial information from 2017, 2018 and the first quarter of 2019 ready to submit as they relate to these imports.

Where Can I Find Help to Make an Exclusion Request?

For a more polished submission, importers may prefer to engage the services of a professional to assist them with government filings. My law firm is helping importers make these requests. We offer flat-fee packages to take the confusion out of pricing and have a streamlined process to get your requests filed ASAP. The deadline to file is 9/30/19. Request a copy of our packages today at legaladmin@clarkespositolaw.com or call us today at (917) 546- 6997 for further discussion.

By: Deanna Clark-Esposito, Esq. • Clark-Esposito Law Firm, P.C. • 1345 Avenue of the Americas, 33rd floor New York, NY 10105 917.546.6997 • www.clarkespositolaw.com • deanna@clarkespositolaw.com Disclaimer: This content of this article is for informational purposes only and should not be construed as legal advice nor as creating a lawyer-client relationship with either the author or the Clark-Esposito Law Firm, P.C. May be considered ATTORNEY ADVERTISING in some states.