China Aluminum Extrusions: 'Subassemblies" Must Also Include Other Materials to be Exempt, Says Commerce
Finished subassemblies must include non-extruded aluminum components in order to be exempt from antidumping and countervailing duties on aluminum extrusions from China, said the Commerce Department in a scope ruling issued Oct. 14. Whether or not aluminum heater core inlet and outlet tubes imported from China by Delphi Automotive Systems qualify as subassemblies, they are made entirely of aluminum extrusions so they can’t qualify for the “finished merchandise” exemption and are subject to AD/CV duties, said Commerce.
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The “finished merchandise” exemption excludes products “containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry,” according to the scope of the AD/CV duty orders on aluminum extrusions from China. Commerce has previously ruled that “subassemblies” of larger assemblies can qualify for the “finished merchandise” and “finished goods kits” exemptions. Delphi argued that its heater core inlet and outlet tubes for automotive heating and air conditioning systems thus qualify, and are exempt.
Commerce’s application of the exemption has recently been the subject of some controversy. The Court of International Trade in September ordered Commerce to more clearly define “finished merchandise,” finding the agency improperly used the language of its “finished goods kit” exemption in order to define “finished merchandise” (see 14092420). However, the CIT decision took issue with whether the “finished merchandise” exemption applies only to products containing all parts necessary to form a final finished good, and not with whether materials limitations apply.
Here, Commerce appeared to rely on a similar method for finding Delphi’s products are subject to duties. The agency pointed to a section of the scope that says its “finished goods kits” exemption does not apply to aluminum extrusions that merely include “fasteners, such as screws, bolts, etc. in the packaging with an aluminum extrusion product.” The limitation also applies to the “finished merchandise” exemption, ruled Commerce. So it’s Commerce’s practice “to apply the ‘subassembly finished goods test’ to subassembly products only after it has first confirmed that the products at issue do not consist solely of extruded aluminum,” said the agency.
Email ITTNews@warren-news.com for a copy of this scope ruling.