Court of International Trade

The Commerce Department is amending the antidumping duty cash deposit rate for stainless steel sinks from China (A-570-983) produced and exported by Shenzen Kehuaxing Industrial Ltd., in order to implement a recent Court of International Trade Decision. During the original AD duty investigation on stainless steel sinks, Kehuaxing’s lawyer filed a required submission 16 minutes late. Commerce rejected the filing and, because the submission was partly used to demonstrate independence from state control, assigned Kehuaxing to the China-wide entity with an AD duty cash deposit rate of 76.53% (see 13041023). CIT thought that too harsh, and in May remanded so Commerce could accept the late submission (see 14051202). Commerce is now giving Kehuaxing its own AD duty cash deposit rate of 33.51%, for subject merchandise both produced and exported by the company. The new rate takes effect July 7.

The U.S. Court of Appeals for the Federal Circuit on Oct. 16 ruled that “shelf-top camisoles” with bust support features are not classifiable as “similar articles” to brassieres, affirming two Court of International Trade decisions. CAFC found that covering features of the shelf-top camisoles mean they are not "similar" to bras, and have to be classified in a residual tariff provision. At issue in the case was not only the tariff classification of textiles, but also the proper interpretation of the phrase “and similar articles” in the HTS. Circuit Judge Jimmie Reyna dissented, arguing that the majority’s interpretation of “similar articles” will “create unnecessary confusion in future classification cases and a high degree of unpredictability in the marketplace.”

The Court of International Trade on Oct. 6 again rejected a new framework from the Commerce Department for conducting antidumping and countervailing duty scope rulings on products included in “mixed media” sets. Tasked by the U. S. Court of Appeals for the Federal Circuit in 2013 with setting out criteria for deciding whether nails included in a tool set imported by Target should be subject to the AD duty order on steel nails from China, Commerce came up with a four-part test that failed to comply with CAFC’s order, said the trade court.

The Court of International Trade on Sept. 24 ordered the Commerce Department to revisit a finding that imports of 17” diameter graphite electrodes are circumventing antidumping duties on small diameter graphite electrodes from China. Although the scope of the AD duty order is limited to graphite electrodes with a diameter of 16” or less, Commerce in a 2012 anti-circumvention inquiry found that 17” electrodes imported by Ceramark had only undergone a “minor alteration” and are still subject to duties. CIT ruled that Commerce failed to consider whether an “alteration” had occurred, because it did not look into whether 17” electrodes did not exist at the time the duties were put in place and the scope was defined. Commerce also failed to address the fact that the domestic companies that originally requested the duties chose to limit AD duties to electrodes with a diameter of 16” or less.

The Court of International Trade on Sept. 23 ordered the Commerce Department to provide a clear definition for the “finished merchandise” exemption from antidumping and countervailing duties on aluminum extrusions from China. Despite the “seductive symmetry” of using the more complete definition for “finished goods kits” to define finished merchandise, the court said the two definitions can’t be conflated and the more threadbare finished merchandise exemption needs fleshing out. CIT also ordered Commerce to explain the application of the finished merchandise exemption to goods designed to work in conjunction with other merchandise, as well as goods with interchangeable parts.

The Court of International Trade on Sept. 18 ordered the government to pay for an importer’s legal fees incurred in a drawn-out and ultimately successful legal challenge to the tariff classification of its tobacco products. Shah Bros. sought compensation under the Equal Access to Justice Act after the government allowed litigation to proceed even though it had conceded in a case involving identical merchandise four years earlier. The trade court found no justification for the delay and ordered the government to pay the importer’s legal fees at rates determined by a survey of several customs law firms.

Skateboard-like “waveboards” are classifiable in the tariff schedule as sporting goods instead of wheeled toys, said the Court of International Trade in a Sept. 22 decision affirming CBP’s classification of Streetsurfing’s “Ripple Board” and “The Wave.” The trade court found that wheeled toys have certain characteristics like a lack of required training or skills, little risk of injury, and no athletic aspect to use. Streetsurfing’s waveboards do not share any of those attributes, and should instead be classified as “other sporting goods” alongside skateboards, said CIT.

The Court of Appeals for the Federal Circuit affirmed a Court of International Trade ruling in Trek Leather that said corporate officers can be liable for negligent misstatements on entry documentation in a Sept. 16 decision. The ruling marks an apparent change of heart for the CAFC, which reviewed the question of corporate officer liability in the case as part of an en banc rehearing (see 14030601). The Appeals Court previously ruled against the CIT and found that Trek Leather's owner, Harish Shadadpuri, was not liable for his company’s undervaluation of entries of men’s suits (see 13073025). Customs lawyers said the case should be the source of serious concern for corporate compliance executives who may face new risk as a result of the finding.

The U.S. Court of International Trade on Sept. 12 shot down a U.S. importer’s challenge to a CBP protest denial over duty-free benefits for Colombian fresh cut flowers. Mex Y Can Trading USA said it sent a timely submission to CBP to get retroactive benefits for 156 entries of flowers imported into the U.S. from February to July 2011, but the court rejected that claim. At the time, the Andean Trade Preference Act (ATPA) had expired for Colombia, but the Oct. 21, 2011 enactment of the U.S.-Colombia free trade agreement put the benefits into force retroactively, allowing the duty-free benefits to be re-liquidated. CBP sent out a message on Oct. 26 that said U.S. importers had 180 days to file re-liquidation requests. The defendant filed the requests on May 1, 2012, which is beyond the 180-day window. The court ruled the defendant filed an untimely request, and therefore the duties will not be refunded. CBP in the message said the ATPA benefits would begin again on Nov. 5, 2011, and the defendant interpreted that as the date for which the 180-day period started on. The court dismissed that argument, and said the CBP message was clear.

Antidumping duty rates set for an exporter of high pressure steel cylinders from China may change, after the Court of International Trade on Sept. 9 told the Commerce Department to rethink the method it used to calculate Beijing Tianhai Industry Co., Ltd.’s rate from the original investigation. Commerce had calculated a 6.62% AD duty rate for Beijing Tianhai in its final determination (see 12062112), but the court took issue with the agency’s use of an alternate method that included zeroing in order to counteract “targeted dumping.” CIT put off deciding the zeroing issue while Commerce decides whether it still wants to use the alternate method at all. Commerce’s redetermination is due in January.