CIT Again Tells Commerce to Clarify 'Finished Merchandise' Exemption From Aluminum Extrusions Duties
The Court of International Trade on Nov. 24 again ordered Commerce to clarify its exemption from antidumping and countervailing duties on aluminum extrusions from China for “finished merchandise” (here). For the second time in two months (see 14092420), Judge Delissa Ridgway found fault with a scope ruling where Commerce declined to grant the exemption, this time for straight edges imported by Plasticoid. CIT took issue with Commerce’s practice of requiring non-extruded aluminum parts to qualify as “finished merchandise.” It pointed to statements from the companies that had originally requested the investigations that appeared to indicate products in final form should not be subject to duties, regardless of aluminum content.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Commerce had found the straight edges, which are machined aluminum extrusions used in drafting and art applications, are simply aluminum extrusions with a fancy name describing their end use. In that respect, they are similar to door thresholds and carpet trim, which are specifically identified as subject merchandise in the scope, said Commerce. Also, the straight edges only include aluminum extrusions, so they are ineligible for the “finished merchandise” exemption, which requires non-extruded aluminum parts that are not fasteners.
Plasticoid argued the aluminum content of its straight edges is irrelevant, because they are stand-alone, finished products ready for their end use and fully functional without adding any other component. Door thresholds and carpet trim, on the other hand, are elements of larger systems. Straight edges meet the requirements in the scope for the “finished merchandise” exemption because they contain “aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry,” said Plasticoid. And although the scope requires non-extruded aluminum parts to meet the “finished goods kit” exemption, the scope has no such requirement for “finished merchandise,” it said.
When questions come up on the interpretation of the scope of an antidumping or countervailing duty order, the intentions of the companies that originally requested the duties are a main consideration. In a 2012 scope ruling on precision machine parts, the companies that had originally petitioned for duties on aluminum extrusions appeared to support Plasticoid’s interpretation of the “finished merchandise” exemption. They said the scope only covers “downstream products that have undergone subsequent processes, and does not cover “downstream products that have been converted into finished merchandise.”
According to CIT, Commerce did not address this distinction in its scope ruling on Plasticoid’s straight edges. “Commerce gave no indication as to what Petitioner possibly could have been referring to which would be more ‘finished’ than the straight edges at issue here. Nor did Commerce explain how the straight edges could have been any further ‘downstream’ – or any more ‘finished’ – than they were,” said the court.
A previous scope ruling called into question whether non-extruded aluminum parts were necessary to be eligible for the “finished merchandise” exemption. In a 2011 ruling on retractable awnings, Commerce noted that the companies requesting the original AD/CVD investigations had told Commerce that “kits and finished products are excluded from the scope … regardless of the percentage content of aluminum extrusions.”
CIT remanded the scope ruling to Commerce to clarify its “finished merchandise” exemption, with a lengthy set of instructions. The court ordered Commerce to consider whether Plasticoid’s straight edges are “finished merchandise,” especially in light of the fact that the companies that had petitioned for duties seemed to suggest downstream products “converted into finished merchandise” are exempt from duties. CIT also told Commerce to consider whether the requirement non-extruded aluminum parts applies to “finished merchandise,” given the petitioners’ refusal to set content requirements in the original investigation.
(Plasticoid Mfg., Inc. v. U.S., Slip Op. 14-136, #14-136, dated 11/24/2014, Judge Ridgway)