July 9, 2004
Due to delay in publishing the Commerce preliminary decision to the Federal Register, the effective date governing suspension of entries subject to the order is June 24, 2004, as required by Title 19 U.S.C. §1673b(d)(1)(B)(2).
Liquidation of entries or warehouse withdrawals of WBF made on or after June 24th is suspended until the final determination is made. Importers are also now required to post a bond or make a cash deposit of the estimated dumping duties, pursuant to the terms of Treasury Decision (T.D.) 85-145, on all entries for consumption or withdrawals from warehouse made on or after June 24th, 2004. This constitutes a correction from our previous update issued on June 18, in which we stated that June 18 is the date of suspension.
Comments on Scope Memorandum
The Federal Register notice of June 24, 2004, indicates that many comments have been received by Commerce on what products should be within the scope of the investigation. These comments have been summarized in a Memorandum issued by Commerce. Commerce is affording an opportunity to address only the comments summarized in its memorandum, as this memorandum contains all of the comments received. Interested parties have until July 30, 2004, to submit additional comments relating to the scope in this investigation. Thus, there is another window of opportunity for importers to write to Commerce for the purpose of excluding their imported products.
Request To Appear and File Comments on Preliminary Determination
Interested parties can submit written comments or make a request to make an appearance at a hearing in Washington, DC, in order to file comments on the preliminary determination. The request to make an appearance or file written comments must be made within 30 days (by Monday, July 26, 2004, since July 24th falls on a Saturday).
Written comments can also be submitted within seven business days after the final verification report is finalized by Commerce. Commerce has indicated that the last verification report to be issued will be some time in early September.
Critical Circumstances Allegations Have (So Far) Been Absent
As of this date, the domestic industry has not filed any "critical circumstances" petitions with Commerce for the purpose of moving back the date of suspension. If such a critical circumstances petition is approved by Commerce, the date of suspension of furniture entries would be moved to "the date which is 90 days before the date on which the suspension of liquidation was first ordered". 19 U.S.C. §1673b(e)(2)(A). However, the industry has up to 20 days from the publication of the final order to submit a petition on these grounds. 19 U.S.C. §1673(e)(1).
For such allegations of critical circumstances to be successful, the petitioner would need to provide sufficient evidence to establish that there is either a history of dumping and material injury by reason of dumped imports in the United States, or that the persons by whom the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value. Further, there needs to be a showing that there is a likelihood of material injury by reason of such sales, and there have been massive imports of the subject merchandise over a relatively short period. 19 U.S.C. §1673(e)(1)(A).
Certain sections from our June 18, 2004, newsletter are set forth below for reference:
According to the ITA fact sheet, the timetable for these events is as follows:
ITA Final Determination
November 5, 2004
ITC Final Determination
December 20, 2004
Signature of Order (Estimated)
December 27, 2004
Importers wishing to clarify their potential liability under the scope provisions are now in a difficult period of uncertainty. Requests for scope determinations cannot yet be obtained until an actual AD order is issued. There is, however, an opportunity to submit comments on Commerce's Scope Memorandum, which must be filed by July 30, 2004. This is the last opportunity for importers to try to exclude their imported merchandise from the scope of the investigation.
Importers now subject to the China-wide rate (198.08%) should explore purchasing from one of the Chinese suppliers who qualified for the Section A rate, which is the 10.92% rate. However, this may not be the final Section A rate, as it may be adjusted up or down.
Finally, companies with a large exposure may choose to cease manufacturing the bedroom furniture in the PRC or plan for multi-country manufacturing, in which initial manufacturing operations occur in China, but final manufacturing operations are performed in a third country. This strategy requires careful legal consideration of a proper and legal plan for third-country manufacture. Such planning considerations take into account statutory requirements, the historical case law, and administrative decisions by Commerce as to the adequacy of such third-country manufacturing. Companies should consult experienced counsel before considering this option.
A failure to adequately review such alternative manufacturing plans may expose an importer to the U.S. antidumping circumvention laws, which could result in AD duties, plus the imposition of civil and/or criminal penalties for improper or fraudulent AD avoidance.
Commerce's final determination will be due November 1, 2004. If the decision of Commerce is affirmative (that there is dumping), the U.S. International Trade Commission must then make its determination as to whether there is injury, which is due December 16, 2004. If the ITC is affirmative (that there is injury), then Commerce will issue an antidumping order.
If Commerce eventually issues an antidumping order, importers and Chinese suppliers will have the right to request judicial review of the antidumping order, provided that they participated in the antidumping investigation (answered a questionnaire, etc.). However, it is premature at this point to consider litigation, since no final determination has been made.
If you have any questions on any of the issues raised in this newsletter, please contact Stephen Spraitzar at (415) 288-0427 or via email at firstname.lastname@example.org.
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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