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President Biden signed HR 8982, the Bulk Infant Formula to Retail Shelves Act, on October 10, 2022. The Act temporarily suspends duty on imports of certain infant formula base powder. The Office of Trade (OT) has updated the Harmonized Tariff Schedule (HTS) file in the Automated Commercial Environment (ACE) to account for this legislation.
U.S. Customs and Border Protection (CBP) will provide duty-free treatment of the eligible infant formula base powder entered or withdrawn from warehouses for consumption on or after 12:01 AM Eastern Daylight Time (EDT) on October 13, 2022, through 11:59 PM Eastern Standard Time (EST) on December 31, 2022.
Duty-free treatment will only be provided to importers of base powder to be manufactured into infant formula authorized to be marketed in the United States or subject to an enforcement discretion letter from the U.S. Food and Drug Administration (FDA). The FDA outlines the guidelines for enforcement discretion to manufacturers to increase infant formula supplies here.
For qualified shipments from FDA-authorized parties, duty-free treatment is limited to certain infant formula base powder and must be exported to the United States on or before November 14, 2022. Authorized importers seeking duty-free treatment for qualifying shipments will make a quota-type entry utilizing subheading 9903.19.23. Any shipment qualifying for duty-free treatment under subheading 9903.19.23 will not be subject to any additional safeguard duties that may be imposed under subchapter IV of Chapter 99 of the HTS. If the import quota threshold is met before December 31, 2022, duty-free treatment will no longer be granted.
Should the importation not qualify for duty-free treatment, the appropriate classification change would be subheading 1901.90.62, which has a duty rate of $1.035/kg +13.6%. This should be the high rate for this particular quota.
Are you unaware of the recent issues with baby formula? Are you unsure of how this temporary duty-free treatment may affect your business? Contact our office today.
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