While this proclamation affects anyone who imports covered Russian-origin articles directly from Russia, it also could affect companies that import articles produced in third countries with significant Russian materials/inputs. The proclamation “increase[s] the column 2 rates of duty on imports of certain articles of the Russian Federation. ....” U.S. Customs and Border Protection (CBP) is responsible for making country-of-origin determinations for purposes of applying the additional duties to a given product. In recent years, CBP has increasingly used the “essence” test to determine the country of origin of products. Under this test, any product that contains Russia-origin content could be subject to the increased duties if the Russian content does not undergo a “substantial transformation” in a third country prior to importation into the United States. As such, companies that import articles incorporating Russia-origin content (regardless of the country of export) should review their country-of-origin determinations and the relevant CBP precedent to confirm whether such products may be subject to increased duties.
This development is the most recent in a series of measures the United States has taken against Russia-origin articles in response to the war in Ukraine. For example, in March of this year, the President issued two executive orders prohibiting certain Russian-origin articles from entry into the United States, including crude oil, petroleum, liquid natural gas, seafood, alcoholic beverages, and nonindustrial diamonds. Then, in April, the President signed the Suspending Normal Trade Relations with Russia and Belarus Act, which suspended nondiscriminatory tariff treatment for Russia and Belarus by imposing the rates of duty set forth in column 2 of the Harmonized Tariff Schedule of the United States, thereby increasing the duty rate that applies to many Russia- and Belarus-origin articles.
1 Proclamation No. 10420, Increasing Duties on Certain Articles From the Russian Federation (June 27, 2022).
