Section 301 Investigation: China's Acts, Policies, and Practices Related to Technology 

Transfer, Intellectual Property, and Innovation - Form to Request Exclusion of Product 

When submitting a product exclusion request using this form, enter the specified 

inforrnation in the following fields and explain the basis and rationale for your statemen s. 

13y completing this form, you certify that the information provided is complete and 

correct to the best of your knowledge. 

1. Indicate whether the comment contains business confidential information (BCI), is a public 

document, or is a public version of a BCI document. 

Public Document 

2. Please provide a complete and detailed description of the product of concern: 

Protein Skimmer Mechanical Water Filters (classifiable in subheading 8421.21.0000). 

3. 10-digit HTSUS item number* for product you wish to address in this product exclusion request: 

*Use numerical characters only with no special characters (example: 1023456789). For help in finding 

the HTSUS item number associated with your product, see https://hts.usitc.gov/ 

8421210000 

4. Requestor Information 

Requestor Name (Last, First): 

Organization Name: 

Christine Banitt-Arndt 

Aquaculture Technologies Inc. 

Note: Representatives submitting on behalf of an organization must enter information below. 

Requestor Representative: Robert Grasing, Sandler, Travis and Rosenberg P.A. 

5. Requestor's relationship to the product: Importer 

6. Does this submission in regulations.govinclude additional attachments? 

NO 

7. Please indicate whether any additional attachment contains business confidential 

information (BCI), is a public document, or is a public version of a BCI document. 

NIA 

VERSION 1 CONTINUED BELOW 
8- Is this product, or a comparable product, available from sources in the United States?: 

NO 

9- Is this product, or a comparable product, available from sources in third countries?: 

NO 

10. Please provide the value and quantity (with units) of the Chinese-origin product of concern 

that you purchased for each calendar year specified. Limit this figure to the products 

purchased by your firm (or by members of your trade association) alone. Please provide 

estimates if precise figures are unavailable. 

2017 Value: No Imports 2017 Quantity: No Imports 

2016 Value: No Imports 2016 Quantity: No Imports 

2015 Value: No Imports 2015 Quantity: NO I mports 

11. Please provide information in support your request, taking account of the instructions 

provided in Section B of the Federal Register notice (note: text entered below can extend 

beyond the apparent size of this box). 

As detailed in the attached letter, Aquaculture Technologies Inc. requests an exclusion from Annex A 

for "Protein Skimmer Mechanical Water Filters (classifiable in subheading 842 I .21.0000)." These 

protein skimmers are not high-tech products that arc strategically important to or related to the -Made 

in 2025" or any other Chinese industrial programs. Moreover, China has never sought our technology 

for these iterns. Furthermore, they are not commercially available outside of China in quantities 

sufficient to meet consumer demand in the United Sates and the imposition of an additional 25% 

tariff will cause severe economic harm to Aquaculture Technologies Inc., its retail customers, and 

American consumers. 

VERSION 1 END 
culture Technologies Inc. 

October 4, 2018 

The Honorable Robert E. Lighthizer 

U.S. Trade Representative 

Office of the United States Trade Representative 

600 17thStreet, N.W. 

Washington, D.C. 20508 

RE: Request for Section 301 Exclusion 

Docket No. USTR-2018-0025 

Protein Skimmers Classified in Subheading 8421.21.0000, HTSUS 

Dear Ambassador Lighthizer: 

Aquaculture Technologies Inc., (hereinafter "ATI") a member of the Red Sea Group 

("Red See) is submitting this exclusion request for certain protein skimmers pursuant to Docket 

No. USTR-2018-0025, Procedures to Consider Requests for Exclusion of Particular Products 

from the Determination of Action Pursuant to Section 301: China's Acts, Policies, and Practices 

Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 32181 (Jul. 

11, 2018). As detailed below, the protein skimmers at issue are not high-tech products that are 

strategically important to or related to the "Made in 2025" or any other Chinese industrial 

programs. Moreover, to the best of our knowledge, there are no USA manufacturers of these 

specific type of protein skimmers and the imposition of an additional 25% tariff will cause 

serious economic harm to ATI, its retail customers, and American consumers. For these reasons, 

ATI respectfully requests that the protein skimmers specifically and narrowly described below, 

which are classified in subheading 8421.21.0000 of the Harmonized Tariff Schedule of the 

United States (HTSUS"), be excluded from Annex A of the USTR Notice published at 83 Fed. 

Reg. 28710 (June 20, 2018) ("Annex A"). 

I. Overview of the Company 

4687 World Houston Parkway #150 • Houston, TX 77032 • Tel: (281)447-0205 • Fax: (281)447-1153 
Ambassador Lighthizer 

Office of the United States Tra 

October 4, 20 1 8 

Page 2 of 8 

esentative 

culture Technologies Inc. 

Located in Houston, Texas, ATI is the North American distributor and importer of record 

for Red Sea aquarium products including artificial salt, supplements, test kits and aquarium 

systems that are sold to customers around the world. Since its inception over 25 years ago, Red 

Sea's vision has been to create a world in which marine and reef aquariums are the aquariums of 

choice for all hobbyists. This passion has guided the company throughout its product 

development and design. Red Sea is committed to providing complete reef solutions, allowing 

hobbyists to focus on the beauty of their reef inhabitants rather than worry about water chemistry 

or the suitability and compatibility of aquarium equipment. 

All of Red Sea's products are designed specifically for the Reef Aquarium hobby market. 

This niche hobby requires many purpose designed products that are used as part of the life 

support systems for the delicate animals that are kept in these aquariums. Most of them have no 

use whatsoever in any other application. Several significant advances in reef-keeping have been 

rnade possible due to Red Sea's commitment to research. This ongoing, original research carried 

out by Red Sea's dedicated team of biologists, chemists and engineers, brings great benefits to 

hobbyists worldwide. Red Sea's unique research into the biochemistry of corals and their 

relationship with the surrounding seawater resulted in the development of the Reef and Marine 

Care Programs. Highly advanced yet easy to implement, the programs empower hobbyists with 

the knowledge and materials to understand and control the fascinating environment within their 

aquarium. 

111. Protein Skimmers at Issue: "Protein Skimmer Mechanical Water Filters 

(classifiable in subheading 8421.21.0000)." 

The product that is the subject of this exclusion request is a protein skimmer, a type of 

mechanical water filter unique to marine aquariums. They are supplemental filtration devices 

essential for successful marine aquariums. Protein skimmers work by creating thousands of fine 

bubbles to efficiently remove waste materials from an aquarium water column. The air bubbles 

attract and condense these waste materials into scummy looking foam and transport it to the 

4687 World Houston Parkway #150 • Houston, TX 77032 • Tel: (281) 447-0205 • Fax: (281) 447-1153 
Ambassador Lighthizer 

Office of the United States Tra esentative 

October 4, 2018 

Page 3 of 8 4 qu culture Technologies Inc. 

collection cup for convenient removal. By removing protein and other organic waste materials, 

protein skimmers: 

> Maintain a healthy aquarium environment; 

9 Allow the primary filtration system to perform more efficiently; 

> Help maintain low nitrate levels by retarding nitrate buildup; 

> Reduce phosphate levels to help prevent aggressive nuisance algae growth; 

• Remove any biological toxins released from corals, algae, or invertebrates; 

> Promote proper gas exchange and increase oxygen level for healthy inhabitants; 

• Help maintain proper pH by preventing acidic condition due to carbon dioxide 

buildup; 

• Help support a large bioload, particularly when used in conjunction with a sump; 

9 Remove oily surface wastes to help improve light penetration; and, 

• Improve reduction-oxidation reactions and reduce disease-causing organisms when 

used with an ozonizer. 

Our protein skimmer features an ergonomic diffusion chamber that evenly disperses the 

fine bubbles created by the skimmer pump across the skirnmer cone, without reducing air or 

water flow. It has three assembly options, which allows for flexible positioning of the pump 

inlet and regulation vale according to an aquarium's sump. It has a unique foam-view window in 

the collection cup to easily monitor and adjust the foam height, as well as a precision geared 

valve for positive flow regulation. Additional features include a quick release pump holder for 

easy maintenance, and vibration absorbing components that ensure quiet operation. Below is a 

photograph of the protein skimmer. 

4687 World Houston Parkway #150 • Houston, TX 77032 • Tel: (281) 447-0205 • Fax: (281) 447-1153 
Ambassador Lighthizer 

Office of the United States Trai esentative 

October 4, 2018 

Page 4 of 8 culture Technologies Inc. 

As you can see, our protein skirnmer is only useful to the salt water aquarium hobbyist, 

and frankly has no use outside the hobby. 

III. Red Sea Products Use Widely Available Manufacturing Technology 

and Are Not a Part of the Made in China 2025 or Any Other 

Chinese Industrial Programs Initiative 

In the USTR's Executive Summary of its Findings of The Investigation Into China's Acts, 

Policies, And Practices Related To Technology Transfer, Intellectual Property, And Innovation 

Under Section 301 Of The Trade Act Of 1974 (3/22/18), it cited a plan published by the Chinese 

government entitled Made in China 2025 (July 7, 2015). In that plan, China names the following 

focus industries: High-end digital control machine tools and robots, aerospace equiprnent, ocean 

engineering equipment and high-tech ships, railway equipment, energy saving and new energy 

vehicles, power equipment, new materials, rnedicine and medical devices, and agricultural 

machinery. None of these categories remotely apply to protein skimmers used as secondary 

filters in salt-water reef aquariums that is the subject of this exclusion request. 

Iv. China Never Attempted to Acquire Red Sea Technologies 

4687 World Houston Parkway #150 • Houston, TX 77032 • Tel: (281)447-0205 • Fax: (281)447-1153 
Ambassador Lighthizer 

Office of the United States Tra esentative 

October 4, 2018 

Page 5 of 8 aqu culture Technologies Inc. 

Red Sea has never been restricted by the Chinese government in our manufacturing in 

China. Our primary manufacturer in China is a wholly-owned foreign enterprise owned by Red 

Sea Aquatics (UK) Ltd., a related company that is also a member of the Red Sea Group. The 

Chinese government did not employ any tactics, such as opaque and discretionary administrative 

approval processes, joint venture requirements, foreign equity limitations, procurements or other 

mechanisms to regulate or intervene in our operations in China. Further, China did not require 

or pressure us to transfer any technology or intellectual property to Chinese company. The 

Chinese government's acts, policies and practices did not deprive our Chinese facilities of the 

ability to set market-based teims in licensing and other technology-related negotiations nor did it 

undermine our control over our technology in China. 

All of the research and development, technology, software, and programming that goes 

into producing Red Sea's products is done in Israel, and all of the intellectual property rights to 

that research, technology, software, etc. is owned by another group member, Red Sea Aquatics 

Development Ltd. In Israel. Our products are used solely for the niche reef aquarium hobby 

market. This market does not represent the "cutting-edge" technology that is being sought by 

China, and we have never experienced any efforts by the Chinese government to unfairly 

facilitate in systematic investment in, or acquisition of, our company or our assets to steal Red 

Sea' s technology. 

Red Sea has never been pressured/required or otherwise forced to transfer data or 

technology. It has not been limited by required Chinese equity in manufacturing nor subject to 

various administrative reviews or licensing processes. The Chinese government has never 

directed nor unfairly facilitated the systematic investment in or acquisition of our assets or 

intellectual property. We are unaware of any data attacks or breaches by the Chinese 

government on any of our manufacturers or other attempts by the Chinese government to 

penetrate our computer networks and access sensitive trade secrets. 

4687 World Houston Parkway #150 • Houston, TX 77032 - Tel: (281)447-0205 • Fax: (281)447-1153 
Ambassador Lighthizer 

Office of the United States Tra 

October 4, 2018 

Page 6 of 8 

esentative 

culture Technologies Inc. 

Finally, our protein skimmers are only caught up in the punitive tariff list because of the 

generic nature of their tariff classification. This classification is based on World Customs 

Organization and CBP rules. The Chinese goverment is not interested in our technology. 

Imposing tariffs on our protein skimmers would only harm U.S. interests, and would in no way 

influence or bring about the elimination of China's acts, policies and practices that threaten IPR 

or trade secrets. 

V. Severe Economic Harm to Red Sea and Other U.S. Interests 

The imposition of tariffs of 25% on the subject protein skimmers would cause severe 

economic harm to U.S. interests. Currently, almost all of the equivalent protein skimmers are 

imported from China and are sold on with low margins. These low margins coupled with 

operational overheads, would force us to pass this tariff increase on to our customers. We 

believe that there are at most about 0.5 million active U.S. participants in this niche hobby. The 

vast majority of these hobbyists are rniddle income earners with limited budgets to spend on nonnecessities such as reef aquarium systems and accessories. A 25% increase would likely lead to 

a decrease in consumer demand and overall market size for our products. 

This loss of revenue would affect our U.S. distribution, sales, and service operations, 

centered in Houston, Texas. The protein skimmer, and other new products adversely affected by 

these punitive tariffs, were meant to help expand our overall business enabling us to recruit new 

sales, support, and operations staff in the U.S. If the overall industry shrinks as a result of these 

punitive tariffs, this expansion will not be able to take place. Where we once expected to hire 

new employees, we may have to let current employees go. In addition, we expect the biggest 

impact will be felt by the employees of thousands of retail outlets that sell our products that will 

suffer from an overall downturn in trade. 

VI. The Subject Protein Skimmers Arc Not Commercially Available Outside of 

China 

4687 World Houston Parkway #150 • Houston, TX 77032 • Tel: (281)447-0205 • Fax: (281)447-1153 
Ambassador Lighthizer 

Office of the United States Trad esentative 

October 4, 2018 

Page 7 of 8 qu culture Technologies Inc. 

Due to the small overall size of the reef aquarium hobbyist market, sophisticated or 

automated production processes are not economically viable. Therefore, we rely on rnore 

traditional, low-tech production processes that are labor intensive. Currently, to the best of our 

knowledge there are no original manufacturers of protein skimmers for aquarium supplements in 

the U.S. 

Given the small size of our industry, shifting production to the U.S. is not feasible for the 

world rnarket. It would require heavy investment in production tooling, which is very expensive 

in the U.S. Labor costs would also dramatically increase. Because of these potential cost 

increases, and because of the absence of any meaningful supply from third party countries, we 

expect that the end result of these punitive tariffs will be a significant increase in retail prices 

leading to a general downturn in our small industry, as opposed to any boost in domestic 

manufacturing. 

VII. Exclusion Proposal 

As established above, our protein skimmers at issue are not high-tech products that are 

strategically important to or related to the "Made in 2025" or any other Chinese industrial 

prograrns. Moreover, China has never sought our technology for these iterns. Furthermore, they 

are not commercially available outside of China in quantities and prices sufficient to meet 

consumer demand. The imposition of an additional 25% tariff will cause serious economic harm 

to ATI, our retail customers, and American hobbyists. For these reasons, we respectfully request 

that the protein skimmers described below be excluded from Annex A: 

"Protein Skimmer Mechanical Water Filter (classifiable in subheading 

8421.21.0000)." 

CBP's enforcement of this exclusion request is very simple not only from a quick visual 

examination of the imported merchandise but from a review of import paperwork, for which the 

invoices will always reference the 10-digit classification number: 8421.21.0000, HTSUS. 

4687 World Houston Parkway #150 • Houston, TX 77032 • Tel: (281)447-0205 • Fax: (281)447-1153 
Ambassador Lighthizer 

Office of the United States Trad esentative 

October 4, 2018 

Page 8 of 8 culture Technologies Inc. 

Very truly yours, 

,

folf prA -

VHI. Conclusion 

Based upon the foregoing, ATI respectfully request that the subject protein skimmers be 

excluded from Annex A, which is the final list of items subject to the additional 25% tariffs if 

imported from China. 

The submitter certifies that the information provided is complete and correct to the best 

of his knowledge. 

Christine Banitt-Arndt 

Chief Operating Officer 

Aquaculture Technologies Inc. 

4687 World Houston Parkway #150 • Houston, TX 77032 • Tel: (281)447-0205 • Fax: (281)447-1153