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 Version of BCI 

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

Seawater Refractometers (classifiable in subheading 9027.50.8015). 

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/ 

9027508015 

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: 

2016 Value: 

2015 Value: 

2017 Quantity: [ 

2016 Quantity: [ 

2015 Quantity: [ 

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 "Seawater Refractometers (classifiable in subheading 9027.50.8015)." These refractorneters 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 items. 

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. 

PUBLIC VERSION 

October 4, 2018 

The Honorable Robert E. Lighthizer 

U.S. Trade Representative 

Office of the United States Trade Representative 

600 17th Street, N.W. 

Washington, D.C. 20508 

RE: Request for Section 301 Exclusion 

Docket No. USTR-2018-0025 

Refractometers Classified in Subheading 9027.50.8015, IlTSUS 

Dear Ambassador Lighthizer: 

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

(`Red Sea") is submitting this exclusion request for certain refractometers 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 Propem, and Innovation, 83 Fed. Reg. 32181 (Jul. 

11, 2018). As detailed below, the refractometers 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 refractorneters 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 refractometers specifically and narrowly described below, which 

are classified in subheading 9027.50.8015 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 esentative 

October 4, 2018 

Page 2 of 8 4 qu. 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 rnarine 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 

made 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. 

11. Refractometers at Issue: "Seawater Refractometers (classifiable in 

subheading 9027.50.8015)." 

The product that is the subject of this exclusion request is a seawater refractometer. This 

is a high-accuracy refractometer specifically designed for reef aquariums. A refractometer is a 

device for the rneasurement of an index of refraction. All transparent materials such as liquids 

refract (distort) light. All transparent materials refract light differently and have what is called a 

"refractive indef which means how much a particular material distorts light. Different 

concentrations of the same liquid have different refractive indexes. The scale of a refractometer 

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 3 of 8 A qu culture Technologies Inc. 

is calculated by using a mathematical algorithm that relates the measured refraction to its 

concentration for a specific liquid. Most refractometers used within the aquarium hobby are not 

specifically designed for reef aquariums and use an algorithm for the measurement of brine and 

at a temperature of 15°C/59°F rather than 25°C/77°F. Brine is a solution of Sodium Chloride 

(table salt) that contains 2 chemical elements. In contrast, seawater contains approximately 70 

chemical elements that include Calcium, Magnesium, Potassium etc. in addition to the Sodium 

Chloride. Seawater and Brine of the same salinity (i.e. the same weight of salt/liter) have 

different refractive indexes and will give different salinity readings if measured on the same 

refractometer. Thus, when using a refractometer that uses an algorithm for the measurement of 

brine, there is a potential for a measurement deviation of up to 1.5 parts per thousand, which can 

have a significant adverse effect on coral growth and coloration. 

Our seawater refractometer directly reads the absolute salinity of seawater at 25°C/77°F, 

which means there isn't any need for seawater or temperature compensation factors. It is 

specifically designed for the ionic content of seawater for more accurate salinity measurement, as 

opposed to industry standard refractometers calibrated for salt brine. Moreover, it is calibrated 

for seawater at 25°C/77°F, the normal temperature range for reef aquariums, while most standard 

refractometers are calibrated at 15°C/59°F. In addition, our seawater refractometer is easier to 

read, has a higher resolution display, is focused to the relevant range for reef aquariums of up to 

40ppt, and includes integrated automatic temperature compensation for accurate measurement at 

standard ambient temperature. Below is a photograph of the refractometer: 

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 4 of 8 culture Technologies Inc. 

Seawater Ref ractometer 

As you can see, our refractometer 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 equipment, ocean 

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

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

machinery. None of these categories remotely apply to refractometers used in salt-water reef 

aquariums that is the subject of this exclusion request. 

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 5 of 8 culture Technologies Inc. 

Iv. China Never Attempted to Acquire Red Sea Technologies 

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 terms 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 Trad esentative 

October 4, 2018 

Page 6 of 8 qu culture Technologies Inc. 

Finally, our refractometers 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 government is not interested in our technology. 

Imposing tariffs on our refractometers 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. SC1. ere Economic Harm to Red Sea and Other U.S. Interests 

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

economic harm to U.S. interests. Since 2015, we have imported [ ] of refractometers valued 

at [ ]. A 25% tariff rate represents a potential revenue loss for our company of 

approximately [ ] per year. This would be a huge revenue loss for our small company. 

Currently, almost all of the equivalent refractometers 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 middle 

incorne earners with limited budgets to spend on non-necessities 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 refractometers, along with other 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 

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

Office of the United States Trad esentative 

October 4, 2018 

Page 7 of 8 culture Technologies Inc. 

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. 

Ng. The Subject Refractometers Are Not Commercially Available Outside of China 

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 more 

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

knowledge there are no original manufacturers of refractometers 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 market. 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 refractometers 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, China has never sought our technology for these items. 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 Arnerican hobbyists. For these reasons, we respectfully request 

that the refractorneters described below be excluded from Annex A: 

"Seawater Refractometers (classifiable in subheading 9027.50.8015)." 

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

atHit)44- 

Ambassador Lighthizer 

Office of the United States Trad esentative 

October 4, 2018 

Page 8 of 8 A qu culture Technologies Inc. 

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: 9027.50.8015, HTSUS. 

VW. Conclusion 

Based upon the foregoing, ATI respectfully request that the subject refractometers 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