January 11, 2005
On January 4, 2005, the U.S. Department of Commerce issued an antidumping order in the case of Wooden Bedroom Furniture from China. This order incorporates the results of the amended final determination published on December 28, 2004, in which based upon ministerial errors, Commerce amended the rates for six Chinese suppliers. Commerce also revised the so-called "Section A" deposit rate, applicable to certain other Chinese suppliers, to 6.65%. The China-wide rate of 198.08% remains unchanged. A summary of events related to this matter is as follows:
Deposit of Antidumping Duties: Because the U.S. International Trade Commission (ITC) determined on December 10, 2004 that a U.S. industry is injured or threatened with material injury as a result of imports of wooden bedroom furniture from the PRC, Commerce has issued an antidumping order. In addition, Commerce has issued instructions to Customs to collect antidumping duties at the applicable rate. For importers who purchased from Chinese suppliers who qualified for a Section A rate, the deposit rate will be 6.65%. For importers who purchased from a supplier that did not qualify for a Section A rate or did not obtain a separate rate, the deposit rate will be 198.08%. These new rates are applicable to entries made on or after December 28, 2004.
New Opportunity For Scope Requests: Now that an antidumping order has been issued, importers or suppliers have the opportunity of filing "scope requests" with Commerce. Scope requests ask Commerce to make a written determination as to whether a specific article of furniture is within the scope of the antidumping order. To make a request, the importer or supplier must submit detailed written information concerning the article in issue and include arguments as to why the merchandise is not covered by the scope of the order. Thus, these requests must be carefully drafted. In fact, it is recommended that assistance from legal counsel specializing in antidumping law be utilized in drafting and filing these scope requests. Because many scope requests are expected to be filed, it may take many months for Commerce to issue a scope determination for a specific product.
Qualifying For A "Section A" Rate: For those suppliers who have not received a Section A rate, it may not be possible to apply for a Section A rate until the first "administrative review" is conducted. For each antidumping order, there is an "anniversary month", which is the month in which administrative reviews can be requested. For this antidumping order, the anniversary month is January. This means that the next opportunity for an importer or supplier to file for a separate and hopefully lower antidumping rate is January 2006. The only exception to this would be "new shippers", which are those suppliers who were not reviewed or could not have been reviewed during the antidumping investigation. Companies applying for a new shipper rate must have made commercial shipments during the 6 months prior to their applications, and must not have made commercial shipments during the original period of investigation.
Commerce Intends To Revise Section "A" Application and "Separate-Rates" Issue
Many importers have considered purchasing from a Section A supplier in order to obtain a lower deposit rate. Importers should be very cautious about doing this, in light of the fact that Commerce is reviewing the entire Section "A" application process and "separate-rates" practice, which was discussed in a recent Federal Register notice. Under the separate-rates issue, Commerce would require that both the exporter and supplier qualify for Section A, in order to obtain the Section A rate. In addition, Commerce has requested comments on when to implement this change. We will address that issue in a separate newsletter. In summary, importers should consult with experts in the field of antidumping law before they consider importing from a Section A company after the publication of the order.
Liquidation of Entries Made During the Antidumping Investigation: Many importers have deposited antidumping duties during the period of June-December 2004, either at exporter-specific rates, Section A rates, or at the China-wide rate. Since the amended final Section A rate has been lowered to 6.65% from the final determination rate of 8.64% and the preliminary determination rates of 10.92% and 9.36% (amended), some importers are probably wondering when they will receive a refund of deposits made at one of the higher Section A rates. The final Section A rate will not be determined until the 1st administrative review is completed. In general, requests for the first administrative review cannot be filed until January 2006 and will probably take 12 to 18 months to complete. Therefore, the liquidation of the entries made during the period of June 24, 2004-December 21, 2004 might not occur until about 2 1/2 years from now (i.e., mid 2007).
Needless to say, if importers are contemplating transactions that are designed to avoid the high antidumping duties of this order, they should consult legal experts before doing so. In addition to requiring antidumping duties, Customs may also issue civil penalties, in the event that the merchandise in the transaction is found to be within the scope of the order.
If you have any questions with regard to this newsletter, please do not hesitate to contact Stephen Spraitzar at (415) 288-0427 or at firstname.lastname@example.org, or George R. Tuttle at (415) 288-0425 or at email@example.com.
Stephen Spraitzar and George R. Tuttle are attorneys with the Law Offices of George R. Tuttle in San Francisco. The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.
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