Commerce Retroactively Suspends Liq in AD Duty Scope Ruling on China Helical Lock Washers
The Commerce Department retroactively suspended liquidation for entries of AREMA lock washers imported by United Steel and Fasteners (US&F), after finding the product is subject to the antidumping duty order on helical spring lock washers from China (A-570-822) in a July 10 final scope ruling. US&F’s argued that Commerce can’t suspend liquidation for entries made prior to the initiation date of a scope inquiry, citing the Court of International Trade’s December 2012 decision in AMSAssociates v. U.S. to bolster its position. But Commerce said the circumstances of US&F’s scope inquiry are different, and in any case the AMS case is still under appeal, and isn’t settled.
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US&F imported its AREMA washers free of AD duties under an agreement with CBP that AD cash deposits wouldn’t be required so long as US&F requested a Commerce scope ruling on the product. The merchandise entered under Harmonized Tariff Schedule subheading 7318.21.0090, which isn’t listed in the scope of the helical spring washers from China AD duty order. US&F requested the scope ruling on April 9. It said the AREMA washers differed from subject helical spring lock washers, for reasons including their intended use in the railroad industry, square or rectangular shape, composition of high-strength steel, and larger thickness-to-diameter ratio than subject lock washers.
Commerce disagreed, finding the washers’ specifications irrelevant for the purposes of the AD duty scope. The language of the order doesn’t exclude the AREMA washers, and they otherwise meet the same functionality characteristics, the agency said. The HTS number isn’t controlling for AD duty purposes either, it said. Importantly, Commerce didn’t go through a “formal scope inquiry” to reach its decision, relying only on the factors enumerated at 19 CFR 351.225(k)(1).
Obvious Scope Coverage Means Retroactive Suspension Reasonable, Commerce says
Domestic petitioner Shakeproof said Commerce should suspend liquidation on US&F’s AREMA lock washers going back to Oct. 1, 2012, the first day of the current review period. Commerce went one step further, suspending liquidation of any unliquidated entries of US&F AREMA washers made after liquidation was first suspended for antidumping duty purpose on helical spring lock washers.
US&F said Commerce was required to follow its regulation at 19 CFR 351.225(l)(3), which says liquidation can only be suspended for entries made “on or after the date of initiation of a scope ruling.” It pointed to CIT’s December decision in AMS Associates v. U.S., which found Commerce’s decision to retroactively suspend liquidation of laminated woven fabric imported by AMS during an administrative review (see 12121904). According to the court, the proceeding was technically an administrative review but was in effect a scope inquiry, so Commerce could only suspend liquidation after the scope inquiry’s initiation.
But Commerce said Section 351.225(l)(3) didn’t apply, because the finding for US&F was not a formal scope inquiry. The regulations were silent on suspension of liquidation in an informal inquiry (where Commerce only looks at the (k)(1) scope factors), it said. And AMS Associates didn’t apply in this case, according to Commerce. The case is currently before the Court of Appeals for the Federal Circuit, so its outcome isn’t certain.
“Although we continue to recognize a U.S. importer’s concern that it should be able to rely upon the view of CBP regarding whether its merchandise is inside or outside the scope at the time of entry, CBP’s view is not dispositive,” Commerce said. Importers’ reliance on CBP may be warranted where scope coverage is so unsettled as to require a formal scope ruling, Commerce said. But “here, the record is sufficiently clear that initiation of a formal scope inquiry is not necessary,” it said. US&F was “on notice that its entries were potentially subject to antidumping duties,” Commerce said. “Because the language used when we first instructed CBP to suspend liquidation of helical lock washers … clearly demonstrates that US&F’s product should always have been suspended, we find that retroactive suspension is reasonable,” it said.
Email ITTNews@warren-news.com for a copy of the scope ruling.