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Request Section A Rate For Wooden Bedroom Furniture From China Next Month

December 15, 2010

During the month of January 2011, U.S. importers and Chinese exporters of wooden bedroom furniture (WBF) from China will have an opportunity to ask for a Section A rate for their wooden bedroom furniture products. The hope in filing such a request would be to lower the current China-wide rate of 216.01% that is being applied to a specific exporter. The current Section A rate is approximately 20%.

Requests for Section A rates must be filed and received during the period of January 1 - 31, 2011 at the U.S. Department of Commerce (Commerce). Commerce will subsequently conduct an administrative review for the period of January 1, 2010 - December 31, 2010. The Section A rate eventually determined by Commerce may be higher or lower than the current Section A rate.

Requirements For Applying For A Section A Rate

Under 19 CFR §351.213(e), an administrative review under this section will normally cover, as appropriate, entries, exports, or sales of the subject merchandise during the 12 months in the period of review (POR), which, in this case will be January 1, 2010 - December 31, 2010. However, in addition to filing during the period of January 1 - 31, 2011, in order to be considered for a Section A rate, at least one commercial sale for export to the U.S. and customs entry must have been made during the POR.

Thus, if the importer/exporter has not made an entry of WBF during this period, it will not be eligible to apply for a Section A rate. If no shipments have been made yet in the POR, there is still time for an exporter to ship an order of WBF to the United States so that it is entered by at least December 31, 2010. The importer would have to pay the China-wide antidumping rate, but this would allow the exporter to apply for the Section A rate.

Under the Commerce rules, only the “exporter” can obtain a Section A rate. Therefore, if a factory sells to an exporter who thereafter sells to a customer in the U.S., the factory will not receive the Section A rate — just the exporter. However, if the factory is the exporter, then the factory can apply for the Section A rate.

If the exporter buys from more than one factory, then the sales from each factory will have to be included in the Section A response. Moreover, Commerce assigns a Section A rate only to approved combinations of exporters and factories. Thus, if Exporter A buys from Factory #1 and this information is disclosed in the Section A application and the Section A application is approved, then the Section A rate applies only to transactions involving Exporter A and Factory #1. If Exporter A subsequently starts purchasing from Factory #2, the Section A rate would not be applicable. Thus, Section A applications can be complicated, both in the information that needs to be provided as well as in their administration.

Consulting with legal counsel specializing in antidumping matters may be advisable when applying for a Section A rate.

Scope Requests

Importers, suppliers and manufacturers should also be aware of the fact that “scope requests” can be filed with Commerce at any time, requesting that Commerce perform a review as to whether a particular furniture product is within the scope of the antidumping order. If Commerce determines that the merchandise is outside the scope, then, pending entries of that product will be liquidated without antidumping duties. Those wishing to file a scope request should consult with the applicable Commerce regulations and possibly consult with legal expertise prior to filing the scope request.

If you have any questions about these issues, please contact Stephen Spraitzar at (415) 288-0427, or via email at steve.spraitzar@tuttlelaw.com .

 

Stephen Spraitzar is an attorney 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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