January 18, 2006
During the month of January 2006, U.S. importers and Chinese exporters of wooden bedroom furniture from China have an opportunity to ask for a review of the antidumping duty rate of specific Chinese exporters. The hope in filing such a request would be to lower the China-wide rate of 198.08% that is applicable to that specific exporter. Such requests must be filed and received at Commerce by January 31, 2006. In addition, the request must be served to all interested parties on the service list. This first administrative review will cover entries made during the period of 6/24/04 - 12/31/05.
During the investigation, which led up to the antidumping order, Chinese exporters were permitted to respond to a Section A questionnaire. Those suppliers and exporters who timely filed complete responses were assigned a Section A rate, which was eventually determined to be 6.65%.
Can Chinese Suppliers/Exporters Apply For A Section A Rate?
Many Chinese suppliers/exporters missed the chance to apply for a Section A rate. Unfortunately, it is not possible to apply for a Section A rate in this current administrative review. However, we believe that it may be advisable for Chinese exporters/suppliers who have not obtained a Section A rate to file for a request for an administrative review. Based upon discussions with Commerce, if there are a large number of Chinese suppliers who apply for an administrative review, then it is possible that Commerce will select a handful of these suppliers (usually the major ones), and designate them as "mandatory respondents". This means that the mandatory respondents would have to respond to a detailed questionnaire, which must be completed and timely filed. The other suppliers who are not named as mandatory respondents will receive a weighted average of the mandatory respondents. However, it would not be clear that Commerce would use this procedure until all requests have been received. Thus, we would encourage a supplier/exporter to file for an administrative review to obtain a possible lower antidumping rate.
Commerce's Combination Rate Policy Will Not Be Applied To This Administrative Review
In April 2005, Commerce published notice that it will assign "combination rates" for exporters receiving separate rates in non-market economy (NME) antidumping investigations. This means that, if certain factories ship through a certain exporter, and the exporter received a lower rate, only the identified suppliers would be able to obtain the lower rate assigned to the exporter. We understand that this practice will not be applied to this administrative review or any other administrative review.
Transactions Involving A Chinese Exporter And Separate Chinese Exporter
We understand that some importers will be importing directly from a factory, but other importers will be importing from an exporter who is not the Chinese supplier. Commerce's policy is to look at the rate that is assigned to the "exporter." Thus, a factory that has not obtained a Section A rate but ships through a Section A exporter will be entitled to a Section A rate upon importation into the United States. However, the reverse is not true. If the Chinese supplier has been assigned a Section A rate, and the merchandise is shipped through an exporter who has not been assigned a Section A rate, then the merchandise will be assigned the 198.08% duty rate (unless the exporter has been assigned a specific rate), at the time of importation into the United States. Thus, importers and suppliers should be very careful about how they construct their transactions, and should possibly consult with legal expertise prior to exportation to the United States.
Importers, suppliers and manufacturers should also be aware of the fact that "scope requests" can be filed with the Department of Commerce at any time, requesting that Commerce 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 with regard to any of the issues raised in this newsletter, please contact Stephen Spraitzar at 415/288-0427, email firstname.lastname@example.org, or George Tuttle at 415/288-0425, email email@example.com
Stephen S. 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.
Copyright © 2006 by Tuttle Law Offices.
All rights reserved. Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.